Thinking about our recent discussions on macro equilibrium

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The year is 2009 and you have just been elected President of the U.S. The economy is in crisis due to problems in the financial sector and housing markets. Unemployment is 9.5% and rising and the BEA reports GDP has decreased over the last two quarters. Thinking about our recent discussions on macro equilibrium, how would you characterize this situation: inflationary? Recessionary? And, given the fiscal tools available, what would you do to remedy the situation? Bonus (2pts): In 2-3 additional sentences, what would a Classical or Hayekian economist advocate?

Reference no: EM13772528

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