Macroeconomics 12th Edition by William Baumol,Alan Blinder

تمرين 8

The year 2007 closed with the unemployment rate around 5 percent, real GDP barely growing, inflation above 2 percent and apparently rising a bit, and the federal budget showing a large deficit.
a. Give one or more arguments for engaging in expansionary monetary or fiscal policies under these circumstances.
b. Give one or more arguments for engaging in contractionary monetary or fiscal policies under these circumstances.
c. Which arguments do you find more persuasive?