You Are the Liaison Between the Bank of Canada and the Department

Essay

You are the liaison between the Bank of Canada and the Department of Finance.Your goal is to coordinate policy efforts to achieve full-employment output in the economy while keeping a fixed real interest rate.You must recommend tightening or easing both monetary and fiscal policies to do this.What would your recommendation be in each of the following situations?
a.People decide to increase saving.
b.Expected inflation declines.
c.The future marginal productivity of capital declines.
d.There's an adverse oil price shock in which the LM curve moves farther to the left than does the FE line