Subprime Financial Crisis has been hitting everywhere in the world, including Taiwan. The subsequent effect on the economy is beyond the financial industry. A recession worry is spreading over; in fact, some claims a recession in the USA is on the way already. However, the inflation is just right at the head. Cutting rate to save economy? How do deal with inflation? Raising rate to fight inflation? Are you sure the economy won't go over the edge of a cliff? Central bank of Taiwan is tackling this challenge recently. The CB appoints you as advisors to recommend a better approach to this seemingly un-manageable twin problem. And you are supposed to come up with a best policy recommendation for the CB as soon as possible. [Group A] You are supposed to come up with a more inflation-conscious recommendation. (This is the approach the CB is taking at the moment. Do not mean it is the better way.) [Group B] You are supposed to come up with a more recession-conscious recommendation. (This is the approach the Fed in the USA is taking now. Again, do not mean it is the better approach for Taiwan.) --

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