Determine the appropriate economic policy

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Question

Given the following information about the economy, determine the appropriate economic policy as well as the expected impact of the policy Percent change in GDP -8.9% Unemployment rate 9.1% Inflation -0.7% The economy is in an expansion, and contractionary policy should be used. The government should decrease spending which will cause the AD to shift to the left Economy is in recession and contractionary policy should be used. Government shoudl decrease spending which will cause AD to shift to the left, price level adn output increase Economy is in expansion and expansionary policy should be used. Government should increase spending which will cause the AD to shift to the right. Price level and output would increase Economy is in a recession and expansionary policy should be used governmetn should increase spending which will cause AD curve to shift to the right price level adn output increase.

Reference no: EM133637479

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