Homework Answers
"D"
They believe that monetary policy is an effective way to counteract negative economics shocks should be used to do so. this we have seen at the time of subprime crisis in the market,
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3. Monetarists believe that A. fiscal stimulus is an effective way to counteract negative economic shocks...
1. (a) (3 Marks) "A counter-cyclical fiscal policy has crowding out effects”. Explain with economic reasoning...
1. (a) (3 Marks) "A counter-cyclical fiscal policy has crowding out effects”. Explain with economic reasoning and appropriate diagram(s). (b) (3 Marks) Define open market operations, and explain how executing them can be used as a tool for the conduct of monetary policy. (c) (4 Marks) Use diagram to explain why do fiscal and monetary policies are ineffective in combating stagflation. How a stagflation be cured?
Most economists believe that discretionary fiscal policy should be used sparingly because of the risk of:...
Most economists believe that discretionary fiscal policy should be used sparingly because of the risk of: Select one: O a. sacrificing equity for efficiency. O b. budget surpluses. O c. lags in adjusting policy, so that policies designed to fight a recession may end up intensifying an inflationary gap. O d. budget deficits. Monetarism suggests that: Select one: 0 a. monetary policy should be used to offset economic fluctuations. O b. discretionary monetary policy does more harm than good. O...
1 2 3 4 When fiscal stimulus is being used to fight a recession, how long...
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3
4
When fiscal stimulus is being used to fight a recession, how long do the inside and outside lags last? a. Several decades b. Several weeks c. A year or two at least d. One to three months Report Problem NEXT QUESTION Other things being equal, when the effective multiplier for fiscal policy is 2, government purchases would require how much change to close a $500 billion negative output gap? ao $1 trillion increase b.o d.o $1...
1) What were the monetary and fiscal policy responses to the "Great Recession"? 2) What were...
1) What were the monetary and fiscal policy responses to the "Great Recession"? 2) What were some of the reasons suggested for why those policy responses didn’t seem to have as large an effect as anticipated on unemployment and GDP growth? Be specific and provide examples. 3) What can policy makers do to address the next (or current) recession? (This is particularly relevant given this past weeks massive stimulus bill.) 4) Should policy makers actively work to manage fluctuations in...
1.The figure below depicts the macroeconomic situation of stagflation[1] inflicted by the negative supply shock. As...
1.The figure below
depicts the macroeconomic situation of
stagflation[1] inflicted by the negative
supply shock.
As the economic advisor to PM Scott Morrison (!), you are
contemplating the most appropriate policy response from the two
choices (note that we do not consider the monetary policy here) in
a given scenario below;
Expansionary fiscal policy
Contractionary fiscal policy
For this question, there is no need to demonstrate the
answer showing in the figure (but useful to have it in your
mind)!...
Normative economic statements are economic policy goals. Equity goals are based on what happens--the fairness of...
Normative economic statements are economic policy goals. Equity goals are based on what happens--the fairness of outcomes. Efficiency arguments are based on how it happens--maximizing the social value of output. We will do equity arguments this week. A compelling normative argument usually contains some positive (factual) supportive statements. Consider these equity statements: Statement One: It is acceptable to use GDP to measure output but it should not be used as a measure of well-being since this is unfair to those...
1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World...
1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World War II, empirical economists noticed that, in many advanced economies, as unemployment fell, inflation tended to rise, and vice versa. The inverse relationship between unemployment and Inflation, was depicted as the Phillips curve, after William Phillips of the London School of Economics. In the 1950s and 1960s, the Phillips curve convinced many policy makers that they could use the relationship to pick acceptable levels...
In an economy where the money supply and aggregate demand have been decreased by the Central...
In an economy where the money supply and aggregate demand have been decreased by the Central Bank, you know that the Central Bank is using 答案选项组 a contractionary monetary policy. an expansionary monetary policy. a loose monetary policy. follow expansionary fiscal policy How does monetary policy affect the market? 答案选项组 Monetary policy has a more of an impact on consumption than investment. Monetary policy has a more of an impact on government spending than investment. Monetary policy has an indirect...
Interest Rate Expectations, Economic Growth, and Bond Financing Recall that if the economy continues to be...
Interest Rate Expectations, Economic Growth, and Bond Financing Recall that if the economy continues to be strong, Carson Company may need to increase its production capacity by about 50 percent over the next few years to satisfy demand. It would need financing to expand and accommodate the increase in production. Recall that the yield curve is currently upward sloping. Also, recall that Carson is concerned about a possible slowing of the economy because of potential Fed actions to reduce inflation....
1. To stimulate economic activity during a severe recession, the strongest appropriate fiscal policy is: a....
1. To stimulate economic activity during a severe recession, the strongest appropriate fiscal policy is: a. an increase in taxes and/or an increase in government spending b. an increase in taxes and/or a decrease in government spending! c. a decrease in taxes and/or an increase in government spending d. a decrease in taxes and/or a decrease in government spending e. a decrease in government purchases and/or a decrease in transfer payments 2. An increase in income tax rates: a. makes...
1. (a) (3 Marks) "A counter-cyclical fiscal policy has crowding out effects”. Explain with economic reasoning and appropriate diagram(s). (b) (3 Marks) Define open market operations, and explain how executing them can be used as a tool for the conduct of monetary policy. (c) (4 Marks) Use diagram to explain why do fiscal and monetary policies are ineffective in combating stagflation. How a stagflation be cured?
Most economists believe that discretionary fiscal policy should be used sparingly because of the risk of: Select one: O a. sacrificing equity for efficiency. O b. budget surpluses. O c. lags in adjusting policy, so that policies designed to fight a recession may end up intensifying an inflationary gap. O d. budget deficits. Monetarism suggests that: Select one: 0 a. monetary policy should be used to offset economic fluctuations. O b. discretionary monetary policy does more harm than good. O...
1
2
3
4
When fiscal stimulus is being used to fight a recession, how long do the inside and outside lags last? a. Several decades b. Several weeks c. A year or two at least d. One to three months Report Problem NEXT QUESTION Other things being equal, when the effective multiplier for fiscal policy is 2, government purchases would require how much change to close a $500 billion negative output gap? ao $1 trillion increase b.o d.o $1...
1.The figure below
depicts the macroeconomic situation of
stagflation[1] inflicted by the negative
supply shock.
As the economic advisor to PM Scott Morrison (!), you are
contemplating the most appropriate policy response from the two
choices (note that we do not consider the monetary policy here) in
a given scenario below;
Expansionary fiscal policy
Contractionary fiscal policy
For this question, there is no need to demonstrate the
answer showing in the figure (but useful to have it in your
mind)!...
1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World War II, empirical economists noticed that, in many advanced economies, as unemployment fell, inflation tended to rise, and vice versa. The inverse relationship between unemployment and Inflation, was depicted as the Phillips curve, after William Phillips of the London School of Economics. In the 1950s and 1960s, the Phillips curve convinced many policy makers that they could use the relationship to pick acceptable levels...
1. To stimulate economic activity during a severe recession, the strongest appropriate fiscal policy is: a. an increase in taxes and/or an increase in government spending b. an increase in taxes and/or a decrease in government spending! c. a decrease in taxes and/or an increase in government spending d. a decrease in taxes and/or a decrease in government spending e. a decrease in government purchases and/or a decrease in transfer payments 2. An increase in income tax rates: a. makes...
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