What is the main problem the economy faces

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Reference no: EM132617133

Suppose the following conditions describe the current state of the Canadian economy.

  • real GDP is growing at an annual rate of 3%
  • the inflation rate is 9% per annum
  • the unemployment rate is 4.5%

1. What is the main problem the economy faces? Explain your answer.

2. What would be the most appropriate way to deal with this problem by means of monetary policy? Justify your answer.

Reference no: EM132617133

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