inflation boom (low unemployment and high inflation) (low unemployment and low inflation)1. Write out a potential cause of the situation2. Discuss what the best policy option is for fiscal policy for both government spending and taxes2.A what goal are you trying to achieve?3. Discuss what the best policy option is for monetary policy in terms of reserve requirements and the discount rate3.a. what will those policies do to GDP, inflation, and unemployment3.b describe in your own word the multiplier or crowding out.4. Does the federal reserve want to buy or sell or bonds to achieve the above result4.a what does this do to the price of bonds and the interest rate5. What would happen if no policy action was taken. Explain it in terms of changes in wages.5.a what will happen to GDP, inflation, and unemployment with no policy
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