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On June 8th, Calgary Mayor Naheed Nenshi was interviewed on CBC-Calgary. Answering a question regarding the City of Calgary could afford spending on its plans to expand the C-Train line to the north of the city, building a new arena and expanding the BMO Convention Centre he had the following answer:
"In cases like this, the evidence has shown that we're all Keynesians in a situation like this. In other words, when interest rates are extraordinarily low - that money is essentially zero per cent right now - and you've got huge unemployment problems and people need to get to work, this is actually the very best time to build infrastructure."
a) Explain what does Mayor Nenshi mean when he said we are "all Keynesians" in a situation like this, and what does Mayor Nenshi mean that "money is essentially zero per cent right now"?
b) Explain in terms of fiscal policy and monetary policy what Mayor Nenshi means with his answer?
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