The
current rate of unemployment is at 9.0%. Inflation is at a
low rate of 2%. Firms are operating at only 70% of their capacity. The
natural rate of unemployment is assumed to be 4%.- What gap is this
economy facing?- What type of Fiscal Policy would you suggest in this case, What might diminish the effectiveness of this policy?- What type of
Coordinated Monetary Policywould you suggest in this case, What might diminish the effectiveness of this policy?