A country has anOutput gap is -3.8%, Inflation is 0.7%, Unemployment is 10% but youth unemployment
is 30%, National debt is 130% and budget deficit is 4.9% - To date the central bank has pursued an accommodating monetary policy and interest rates have fallen to zero. Despite low interest rates, producer and consumer confidence have remained weak. Explain how the government and central bank policies would impact on the economy using relevant diagrams and equations. In your answer, you should refer to the policy mix.