In terms of social policy why and how does the government intervene in the economy in terms of monetary and fiscal policy?
In terms of social policy why and how does the government intervene in the economy in...
7. Use of discretionary policy to stabilize the economy Should the government use monetary and fiscal policy in an effort to stabilize the economy? The following questions address the issue of how monetary and fiscal policies affect the economy, and the pros and cons of using these tools to combat economic fluctuations. The following graph shows a hypothetical aggregate demand curve (AD), short-run aggregate supply curve (AS), and long-run aggregate supply curve (LRAS) for the U.S. economy in April 2020. Suppose the government...
Explain how fiscal policy (government spending and taxes) and monetary policy (determining interest rates) affect the level of output and employment in the economy according to Keynesian theory. What fiscal and monetary policies should the government follow to pull the economy out of a recession?
If the US economy is doing well, both the Fed and the government may pursue tighter fiscal and monetary policies. What are the objectives of such a policy mix? How might a tighter fiscal and monetary policy mix be implemented? Will crowding out be a problem? Explain why or why not
An interventionist believes that the government can and should intervene in the economy. List several reasons for government intervention in the economy. List several reasons for government nonintervention. Are you an interventionist? Why or why not?
8. Using policy to stabilize the economy 8. Using policy to stabilize the economy The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to whether the government should attempt to stabilize the economy. Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply. Shifts in aggregate demand are often the result of waves of pessimism...
1. Determine how each of the following monetary or fiscal policy would shift the aggregate demand curve. Illustrate and explain the following effect. a. As the economy is in the state of recession, the government decided to increase government spending. b. Central bank decided to fight an inflationary economy by reducing money supply. c. Under full employment economy, the government has decided to increase taxes on income earned by people.
III. Monetary policy under flexible exchange rates a. How does a monetary expansion in an economy with flexible exchange rates affect consumption and investment? b. How does a monetary expansion in an economy with flexible exchange rates affect net exports?
Explain why the expansionary monetary policy becomes ineffective during a liquidity trap? Suppose the government takes an expansionary fiscal policy by increasing its expenditure on military equipment. Here, would an expansionary fiscal policy be more effective than expansionary monetary policy to escape a liquidity trap?
Econ HW, please help! UTION # FISCAL POLICY NAME the mix of government spending and taxing in order to balance the Fiscal policy is best defined as: uncontrolled government spending, altering the mix of govern budget every fiscal year. changes in govern macroeconomic goals. vernment spending and taxing for the purpose of achieving certain minimizing government expenditures over the fiscal year. , while reases in government spending and lower taxes represent decreases in government spending and higher taxe contractionary fiscal...
. How does the government officially measure employment and unemployment in the economy? Why is it usually stated that the official unemployment rate likely underestimates the actual level of unemployment in the economy?