Canada is experiencing a recession and as a senior economist you have been asked to make a monetary policy recommendation to “fix” the recessionary problem. What policy advice would you give and how will that cure the recession.
Show your answer in two graphs side by side. In the left graph show the effects of monetary policy on interest rates. In the right graph show the effects of monetary policy on AD and AS curves. In the right graph start off from a position of recession to cure the economy to its long run equilibrium. Label your graphs and show starting and ending positions through arrows and numbers such as 1 (starting position) and 2 (ending position)
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