Explain the relationship between the effectiveness of monetary policy and the interest elasticity of money demand. Will the monetary policy be more or less effective the higher the interest elasticity of money demand? Explain. Now explain the relationship between fiscal policy and the interest elasticity of money demand.

Q: What is the crowding out effect? Discuss the effectiveness of fiscal policy under the crowding out…

A: Answer: Step 1: The crowding-out effect refers to the decline in private investment due to fiscal…

Q: In case of DEFLATION, mention that which particular type of fiscal policy will be used and why and…

A: Deflation occurs when the price level falls in the economy. It is usually when people prefer to hold…

Q: Who sets fiscal policy?   a. the U.S. Treasury and the U.S. Congress   b. Congress and the…

A: The fiscal policy is the way by which a government adjusts its spending levels and tax rates to…

Q: In a closed economy, is the fiscal policy effective when the demand for money is interest rate…

A: A closed economy is defined as a country that is self sufficient and autarkic. A closed economy is…

Q: ) In case of DEFLATION, mention that which particular type of fiscal policy will be used and why and…

A: Deflation: Deflation refers to a situation of overall contraction in economic activities or in other…

Q: Assume the economy is at an output level that is above the potential GDP, if a contrary fiscal…

A: Fiscal Policy refers to changes in the government expenditure or tax rates in order to bring the…

Q: What is an expansionary gap? What fiscal policy might close that gap?

A: Answer: Introduction: Expansionary gap: when the actual output level exceeds the potential output…

Q: If the marginal propensity to consume is 0.2 and the government increases its spending by ¥1…

A: Marginal propensity to consume is 0.2 => MPC = 0.2 ----------------- Spending multiplier = 1 / (1…

Q: how discretionary fiscal policy fights recession and inflation

A: The fiscal policy of the government used as per the need of the government is discretionary fiscal…

Q: I need help with these two. True or false questions.  Fiscal policy is the set of policies that…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 1 2 3 4   Year Actual budget deficit (–) or surplus (+) Standardized budget deficit (–) or…

A: INTRODUCTION The central bank mainly uses two types of monetary policies: expansionary and…

Q: In each of the following cases, determine whether the policy is an expansionary or contractionary…

A: In the Keynesian macroeconomic theory, government plays a very important role in stabilizing the…

Q: What are some fiscal policy measures that can be enacted by the legislative and executive branches…

A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Q: Right now many economies in the world are experiencing a downturn due to the Corona Virus. a) What…

A: Hello, thank you for the question. Since there are multiple subpart questions posted here, only the…

Q: Discuss two reasons why discretionary fiscal policy (expansionary & contractionary) may be…

A: Contractionary fiscal policy:- When the government either slashes expenditure or hikes taxes, it is…

Q: |An economy is in a below​ full-employment equilibrium.   What is the effect on aggregate demand and…

A: The full-employment level is the situation when an economy is able to reach its potential output…

Q: One of the main arguments against using Fiscal Policy is the crowding out effect. Suppose the…

A: Quantitative easing is a part of expansionary monetary policy.

Q: Create a graph with an aggregate demand curve and an aggregate supply curve in the short-run. Use…

A: An Aggregate Demand-Aggregate Supply model is a macroeconomic model that represents the incumbent…

Q: Which is considered expansionary fiscal policy? a)a tax increase for wealthy individuals b)an…

A: Fiscal Policy is  the use of tax policy and the government expenditure that can influence the…

Q: Which legislative action shifted the budget power from the executive branch to the legislative…

A: In the United States, there are various acts implemented to manage the government budget because…

Q: Can you explain policy lags briefly and compare fiscal and monetarypolicies with respect to inside…

A: A policy lag implies the lag between the time when economic problem arises and the effect of the…

Q: when can we say that fiscal policy succeeded and where/ when can we say that fiscal policy has…

A: Fiscal policy refers to the actions used by governments to stabilize the economy, particularly…

Q: Firstly, explain how monetary and fiscal policy is implemented and how they can be used to influence…

A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…

Q: Algonquin's equilibrium price level and real output? The initial equilibrium price level and real…

A: MPC = 0.33 Natural Unemployment rate = 4.5% Price level  (2010=100) Real GDP AD0 Real GDP AD1…

Q: Why is a $100 billion increase in government spending on goods and services more expansionary than a…

A: Disclaimer :- As you posted multiple questions we are supposed to solve only the first one. And if…

Q: Discuss the current Fiscal Policy with the impact of the coronavirus on macroeconomics in place to…

A: To revive any economy from the brink of recession there can two types of policies:- Expansionary…

Q: In mid-2001, the Bush administration won congressional approval for lower income tax rates. One…

A: Supply-side policies are based on the concept that tax cuts for producers and providers of commodity…

Q: Assume an economy where the government embarks on an expansionary fiscal policy, explain the effect…

A: Fiscal and Monetary policies are used to tackle the macroeconomics conditions like aggregate demand,…

Q: Assume an economy where the government embarks on an expansionary fiscal policy, explain the effect…

A: The IS curve shows all the combinations of income level and interest rate level at which goods…

Q: One criticism of the fiscal policy ineffectiveness is because: A.the velocity of money is…

A: Fiscal policy: Through the use of government expenditure and tax measures to control economic…

Q: Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in…

A: Expansionary Policy: Expansionary monetary arrangement incorporates tax breaks, move installments,…

Q: Which statement below is true of ONLY fiscal policy? Uses government expenditures to create demand…

A: The government uses two types of macroeconomics policy which are fiscal and monetary policy. The…

Q: Determine whether the following represent an example of discretionary fiscal policy or an automatic…

A: Automatic stabilizers and discretionary fiscal policies play an important role in controlling the…

Q: 1. Explain the relationship between the effectiveness of monetary policy and the interest elasticity…

A: Effectiveness of monetary policy: Monetary policy is very effective when it suits the countries…

Q: Which pairs of operations BEST  fit with fiscal policy?   A.) Discount rate and Government…

A: Fiscal policy refers to the actions adopted by the government, involving changes in taxation and/or…

Q: Which statement below is true of ONLY fiscal policy? Uses government expenditures to create demand…

A: Fiscal policy refers to the process by which the government adjusts its revenue, expenditure, and…

Q: During 2008, the United States began to experience what has become known as the Financial Crisis.…

A: Since you have asked multiple question, we will solve the first question for you. If you  want any…

Q: An economy is currently in a recession. Assume the government budget is balanced. In the absence of…

A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…