Q. The economy has seen the unemployment rate decrease from 8.56 %to 6.15 percent, the inflation rate increase from 1.4 %to 3.2 %also there has been a 17 %increase in consumer spending also a 22.5 %increase in investment spending in the similar time period.

Given the above, illustrate what would you predict about the overall direction of the economy? Explicate your answer by referring to each of the indicators cited.

State the fiscal policy which will already be automatically operating, as well as the appropriate discretionary fiscal policy which the government should adopt, given the above situation.

State the appropriate monetary policy which the Bank of Canada should be operating, given the above situation.