Use the given scenarios and the information you have learned about Fiscal and Monetary policy to complete the questions that follow Over the last two years, the unemployment rate in Westerlight has risen from 4% to 8%, while GDP growth has been 1.5%. Milo, a citizen of Westerlight, currently doesn’t have a job and although he is actively searching, has been unable to find one. The Results As the money supply (increases/decreases), businesses will get (more/less) money and will (hire/fire) workers so that unemployment (increases/decreases). When that happens Milo will earn (more/less) money and will be able to spend (more/less) so that the economy and GDP will (expand/contract) and prices will (rise/fall) .

Monetary policies are policies that are implemented by the central bank to control inflation by…

Answered: Use the given scenarios and the…

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter17: Stabilizing The National Economy

Section: Chapter Questions

Problem 7AA

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Use the given scenarios and the information you have learned about Fiscal and Monetary policy to complete the questions that follow
Over the last two years, the unemployment rate in Westerlight has risen from 4% to 8%, while GDP growth has been 1.5%. Milo, a citizen of Westerlight, currently doesn’t have a job and although he is actively searching, has been unable to find one.
The Results
As the money supply (increases/decreases), businesses will get (more/less) money and will (hire/fire) workers so that unemployment (increases/decreases).
When that happens Milo will earn (more/less) money and will be able to spend (more/less) so that the economy and GDP will (expand/contract) and prices will (rise/fall) .

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