Consider the following Gross Domestic Product (GDP) growth, Consumer Price Index (CPI) growth, and unemployment rate data for the hypothetical economy over a two-year period. Year GDP Growth CPI Growth Unemployment Rate 1 3.5% 2.0% 6.1% 2 -5.6% 0.1% 10.2% Based on the data, at the end of year 2, which monetary policy stance would be appropriate for the current state of economy? a. expansionary monetary policy to decrease the interest rate.
b. contractionary monetary policy to increase the interest rate. c. expansionary monetary policy to increase the interest rate.
d. contractionary monetary policy to decrease the interest rate.