Suppose the potential (full) GDP is $13 trillion, but actual GDP is $11 trillion. The MPS is 0.25 and the price level is 150.
a) Referencing the above data, specifically explain the monetary policies that could be used to correct the situation.
b) How would classical economists respond to the situation described above?
c) Briefly explain who benefits from international trade and who is harmed. You may use a specific example to explain but are not required to.