Macroeconomics 13th Edition by William Baumol ,Alan Blinder

Exercise 10

The year 2014 closed with the unemployment rate just below 6 percent, real GDP growing at roughly 2.5 percent, inflation below 2 percent, and the federal budget showing a deficit under 3 percent of GDP.
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 (This is a question you might want to discuss in class.)