Answer to Question #132698 in Macroeconomics for Faisal raza

Question

decide if you would use Easy-Monetary policy or Tight-Monetary policy. Explain each scenario within 150 words.
Scenarios:
RGDP dropped from 3 percent to 1 percent in the last year.

The CPI and GDP deflator have risen 3 percent in the last six months.

Commercial interest rates are rising, but the SBP has not raised rates.

RGDP is growing steadily, and prices are rising sharply.
Answer:

The Pakistan is experiencing both high inflation and high unemployment.

We are in a recession. Factory orders are down, and the economy appears to be slumping.

Unemployment is low and prices are rising steadily.

Unemployment rates are pushing 11 percent while the CPI has fallen from 8 percent to 2 percent growth.

We are in a recession but are experiencing high inflation.

The money supply appears to be tight, and prices are on the rise.

Answer 1

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