Answered: What is the importance of fiscal policy…

Business

Economics

What is the importance of fiscal policy during times of economic recession?

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 9SQP

See similar textbooks

Related questions

Q: Distinguish between automatic fiscal policy and discretionary fiscal policy. What type of fiscal…

A: Fiscal policy refers to the government policy regarding tax and government spending which stabilizes…

Q: Describe fiscal policy. How can it affect the money supply, interest rates, and the expansion and…

A: Fiscal policy refers to the method of government spending and tax policies to take a control over…

Q: What is the meaning and definitions of fiscal policy?

A: Fiscal policy is implemented by the government of a country. Money supply refers to the total volume…

Q: Briefly state and evaluate the problem of time lags in enacting and applying fiscal policy. How…

A: Fiscal Policy:Fiscal policy is the tool of government through which it maintains the economy of a…

Q: Why do you think that expansionary fiscal policy can fail during a recession?

A: Recession is a situation in the economy, when there is general decline in the economic activity. For…

Q: Council Economic Advisers (CEA)

A: The Council Economic Advisers[CEA] consist of three members. The Chairperson, who is appointed by…

Q: What is expansionary fiscal policy? What is contractionary fiscal policy? Does expansionary fiscal…

A: In Keynesian macroeconomic theory, aggregate demand plays a very major role in stabilizing the…

Q: Classify each statement based on the type of fiscal policy to which it refers. Expansionary fiscal…

A: The fiscal policy action that is used by the government to increase the aggregate demand is known as…

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: Which fiscal policy would make a budget surplus smaller or a budget deficit larger? lower government…

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: What are the reasons of fiscal policy not being effective in an economy according to classical…

A: The classical theory focuses on free markets and that the markets will regulate themselves when they…

Q: when is the most appropriate time economically speaking for the federal budget be in a deficit?

A: A budget deficit is a situation when government spending exceeds the government's total income. A…

Q: If inflation is a major issue in the economy, what would be the correct fiscal policy response from…

A: Fiscal policy refers to changes or adjustments in the expenditure(spending) and/or the taxes so as…

Q: What are the two things Congress could manipulate to enact Discretionary Fiscal Policy?

A: Congress is the legislative branch of Federal Government. Fiscal Policy refers to change in…

Q: How did John Maynard Keynes economic theory influence the 20th Century fiscal policy?

A: Fiscal policy: - it is a tool of the government of a country in which the government adjusts its…

Q: Summarize MMT in one sentence.

A: MMT means Modern monetary or money theory.

Q: Discuss the two (2) main tools that a government can use to implement fiscal policy.

A: The term 'fiscal' relates to the government's budget and signifies 'budget.' Fiscal policy is the…

Q: Explain each of the tools that exist in expansionary fiscal policy and contractionary fiscal policy.

A: Fiscal policy is the use of government spending and taxation to adjust the economy. It is a method…

Q: Why do critics charge that fiscal policy has a “big-government bias”?

A: Answer-Fiscal policy is the notion that government should actively stimulate the economy in bad…

Q: Our federal government establishes a budget that determines what programs and services can be…

A: Answer- Need to find- Our federal government establishes a budget that determines what programs and…

Q: If the president and parliament agree on a policy to reduce the budget deficit by increasing taxes…

A: If the government deicides to adopt a contractionary fiscal policy by increasing the taxes,…

Q: The reason why fiscal policy should be in tune with monetary policy when the economy is in the…

A: Hey, thank you for the question. Since there are multiple questions posted, we will answer first…

Q: Explain why implementation lag for fiscal policy is longer than monetary policy.

A: Fiscal Policy Monetary Policy The fiscal policy is the use of government revenue (taxes or tax…

Q: What are the primary goals of expansionary and contractionary fiscal policies and their effects on…

A: Expansionary fiscal policy happens when the government decreases the tax rate or raises its…

Q: What is classes as an expansionary fiscal policy?

A: Fiscal policy is the government-imposed policy used to change economic conditions like demand,…

Q: What is the difference between expansionary and contractionary fiscal policy and what effects does…

A: Fiscal Policy: Fiscal policy is a part of an economic policy that is monitor by the government of…

Q: What is the role of the Council Economic Advisers (CEA) as it relates to the effectiveness of the…

A: The CEA was settled under the Employment Act,1946. It was established to provide the president with…

Q: What are the potential issues with fiscal policy?

A: The use of govt spending and taxation policies to impact economic circumstances, particularly…

Q: What is the impact of using Fiscal policy tools on an economy - more specifically aggregate demand…

A: The aggregate demand is the aggregate demand of all the goods and services produced in the economy.…

Q: Explain how fiscal policy can be implemented if an economy is in the downswing of a business cycle.

A: Fiscal policy is tools available to the central government to mitigate the economic consequence by…

Q: How would you explain Discretionary fiscal policy:

A: Fiscal Policy- It is the policy adopted by the government to bring economic stability by the help of…

Q: What is fiscal policy? When should fiscal policy be used? Are there any negatives associated with…

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

Q: Why is getting the magnitude, or dollar size, of the policy change just right the most difficult…

A: Discretionary fiscal policy is a government policy used for raising the aggregate demand/ spending…

Q: When the economy is in a recessionary mode, what will likely be the actions by government using…

A: In recessionary mode, the government pursue the expansionary fiscal policy which has two tools which…

Q: What is supply-side economics? Does it oppose the Classical, Keynesian, or Monetarist theory? How…

A: Answer:- Suррly-side eсоnоmiсs is а mасrоeсоnоmiс theоry whiсh аrgues thаt eсоnоmiс grоwth…

Q: Fiscal Policy) Was fiscal policy effective when the U.S. economy was experiencing stagflation during…

A: Fiscal policy is the policy used by government to stabilize the economy in the business cycle. The…

Q: What should be done to combat inflation or an economy that is growing too quickly using fiscal…

A: Answer: When an economy is experiencing inflation or growing too quickly then the contractionary…

Q: Explains in detail fiscal policy, its role, and its effects on short-term and long-term economic…

A: Fiscal Policy: The Fiscal Policy is the revenue and expenditure policy of the government to…

Q: Expansionary fiscal policy increases the government budget deficit. True, False, or Uncertain?…

A: Fiscal policies are the policies that are managed by the government with the aim of influencing…

Question

What 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?

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What 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? What is the importance of the Central Bank in the financial market?
What is the reason why fiscal policy should be in tune with monetary policy when the economy is in the recession phase? What is the importance of the Central Bank in the financial market?
What is the reason why fiscal policy should be in tune with monetary policy when the economy is in the recession phase?
What is the difference between fiscal and monetary policy? What fiscal and monetary steps can the government and the central bank undertake during times of recession to help the economy? What are the pros and cons of fiscal and monetary policy?
Explain the difference between fiscal policy and monetary policy. What are some of the reasons these macroeconomic policies are used?
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?
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.
In theory, fiscal policy can be as effective in stabilizing the economy as is monetary policy. What are the practical reasons that modern nations typically rely on central banks and monetary policy for stabilizing output, employment, and inflation?
When the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy? Is it better to concentrate on aggregate demand or aggregate supply? Why?
Considering what you've learned about both fiscal and monetary policy, what are some of the benefits you might see from using monetary policy instead of fiscal policy to address common economic downturns? What could be some of the disadvantages?
What policy might the federal government implement with regard to taxes and spending to help stop the economy from falling into recession?
Explain what kind of fiscal policy and what kind of monetary policy are likely to reduce GDP.