- Recently, the US government has used fiscal stimulus to reduce the unemployment rate resulting from the recession the US economy is experiencing. The Federal Reserve also invoked monetary stimulus as well. Should we now be concerned with inflation? If so, which one of these policies is more likely to result in inflation? Else, explain why you believe that the economy will not experience inflation in the near future.
2.Give an example of a policy used to correct an economic fluctuation. Also, explain the impact of the policy using Y = C + I + G + NX.
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