1. Chapter 17: Using the AA-DD diagram, briefly explain: a. the effects of a temporary decrease in aggregate demand. b. how fiscal policy can be used to deal with (a) above. C. how monetary policy can be used to deal with (a) above.
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A: The monetary policy is implemented using the tools of interest rates, open market operations, and…
Q: )Using short-hand symbols, explain the effects of a contractionary fiscal policy
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Q: Fiscal and Monetary Policy Assignment When the economy gets into serious problems, the government…
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Q: What specific monetary policy tools would you use to stimulate aggregate demand and how? What…
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A: Recession is an economic situation in which people face a fall or slowdown in the general economic…
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- a. What are the fiscal policy tools the government can use to expand an economy that is in a recession? Explain the interaction between monetary and fiscal policy?b. Explain how monetary policy is expected to affect investment and aggregate expenditure and discuss its connection with interest rates and output?Fiscal and Monetary Policy Assignment When the economy gets into serious problems, the government has two policies that offer the potential to get us back to equilibrium. Fiscal Policy works through government spending and taxes, while Monetary Policy works through the money supply. Read each scenario below and decide what the correct fiscal and monetary policy would be to correct the issue. 1. You read the following information on the economy. The economy has fallen into a recession. Use this information to do three things below: A. Draw an AS & AD graph that fits the details above. B. What is the corrective fiscal policy in this case?Use the following diagram to answer the question: Aggregate spending Total income, production As a result of policy implementation, the aggregate spending curve swivel upwards from A1 to A2. Which policy was applied to achieve this outcome? a. Contractionary monetary policy b. Expansionary fiscal policy c. Contractionary fiscal policy d. Expansionary monetary policy Clear my choice
- You read the following headline in the newspaper: "Lower tax rates have led to an increase in housing starts." Please assess if (a) this is fiscal or monetary policy (b) the policy is contractionary or expansionary (c) GDP will increase or decrease (d) Unemployment will increase or decrease This is blank1 - Word Answer Write your response here... (fiscal/monetary) policy. This policy is blank2 - Word Answer Write your response here... (expansionary/contractionary). It will lead to a(n) blank3 - Word Answer Write your response here... (increase/decrease) of GDP while unemployment will tend to blank4 - Word Answer Write your response here... (increase/decrease).1. Use of discretionary policy to stabilize the economy In an effort to stabilize the economy, is it best for policymarkers to use monetary policy, fiscal policy, or a combination of both? The following questions address the ways monetary and fiscal policies impact the economy and the pros and cons associated with using these tools to ease 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 economy in January 2025. According to the graph, this economy is in .To bring the economy back to the natural level of output, the government could use monetary or fiscal policy such as Shift the appropriate curve on the following graph to illustrate the effects of the policy you chose. 150 LRAS AS 110 X AD 70 24 26 OUTPUT (Trillions of dollars) PRICE LEVEL 130 85 50 20 22 28 30 AD ロー AS ? Suppose that in January 2025, policymakers undertake the type of policy that is…Read the following quote and explain in complete sentences whether it discusses fiscal policy, monetary policy or both. “Taking substantial action at this point, though, would send what could be a negative message to the market — that the balance sheet runoff, which former Chair Janet Yellen said would be ‘like watching paint dry,’ is running into snags and requires corrective action. However, the Fed would have no choice if there are indications that it can't control the market movements, particularly considering the record level of Treasury debt the government has issued this year.”
- from the news article (https://foreignpolicy.com/2020/09/16/coronavirus-covid-economic-impact-recession-south-korea-success/) Q1. South Korea announced stimulus package early on, in April. Use Aggregate demand and Supply diagram to show how the stimulus package must have worked? Q2. What is multiplier? How does it work? Do you think it worked in South Korean Case?Explain the difference between fiscal policy and monetary policy. What are some of the reasons these macroeconomic policies are used? Elaborate on reasons these policies are used.As you have learned in Unit 8 (this week), monetary and fiscal policy play important roles in economic stimulation and or stabilization. In this regard: a. When is it appropriate to use monetary and fiscal policy to stimulate or stabilize the economy? b. When is it inappropriate to use monetary and fiscal policy to stimulate or stabilize the economy? c. What specific fiscal policy tools would you use to stimulate aggregate demand and how? d. What specific monetary policy tools would you use to stimulate aggregate demand and how? e. What is your conclusion, should policymakers use the monetary and or fiscal policy to stimulate aggregate demand? Explain briefly.
- What is ? 1-)Potential GDP 2-)Monetary Policy 3-)Fiscal PolicyWhat is the difference between monetary policy and fiscal policy ? ExplainWhat is the importance of fiscal policy during times of economic recession? What is the reason why fiscal policy should be in tune with monetary policy when the economy is in the recession phase? How important is the Central Bank in the financial market?