Assume the economy has entered a recession. Identify two fiscal and two monetary policy actions that could be used to alleviate the recession and explain how each policy would improve the economy.
Q: An intended goal of expansionary fiscal policy and an easing of monetary policy is Select one: a.…
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Q: Identify the various policy choices available when an economy experiences an inflationary or…
A: Inflationary gap refers to the situation when economy's real output is more than its potential…
Q: Can governments use expansionary fiscal policy or expansionary monetary to effectively fight…
A: Answer: The use of fiscal policy and monetary policy is an effective tool to control the…
Q: True or False: Economists today believe monetary and fiscal policy can help reduce the magnitude of…
A: Monetary policy is defined as the macroeconomic policy that is formulated by the Central Bank.…
Q: Complete the chart on benefits and drawbacks of monetary and fiscal policy
A: The usage of revenue raising and expenditure policies by the authority to ensure public income and…
Q: Every policy must have two parts. Explain these two parts with examples of each.
A: The two parts of the policy include monetary policy initiated by the government and fiscal policy…
Q: Fill in the Blanks Type your answers in all of the blanks and submit You read the following headline…
A: Since we only solve upto 3 subparts, we will answer (a) to (c) only. Please resubmit the other part…
Q: Based on your understanding of government economic policy, which of the monetary or fiscal policy…
A: Fiscal policy refers to the government policy that stabilizes th economy through bring changes in…
Q: is monetary policies in dealing with the consequences of recession is better than the use of fiscal…
A: Monetary policy is the government policy which leads to changes in money supply which helps in…
Q: Explain what are the lags in macroeconomic policies. Do these lags have more effect on monetary…
A: Macroeconomic policies are used to stabilize the economy in different phases of the business cycle.…
Q: How an economist thinks that the economy works—is it self-regulating or not?—influences his opinion…
A: SELF REGULATING ECONOMY. Classical economists believe in self-regulating economy. Wage rate and…
Q: What happens when an economy was initially in full employment, following a strongly expansionary…
A: Answer: Full employment refers to the level of employment where output is maximum when all the…
Q: What were the monetary and fiscal policy responses to the Great Recession? Discuss their…
A: During the late 2000s, the nice Recession was defined by a dramatic drop by profitable exertion.…
Q: Determine whether the following items are examples of expansionary fiscal policy, contractionary…
A: As we all know that when talk comes about communist type of government, there is complete and…
Q: Fiscal and Monetary Policy Assignment When the economy gets into serious problems, the government…
A: Recession refers to the situation where economic activities slow down and output growth is less than…
Q: You are advising the Bank of Canada and the Federal Government. The economy is in a state of…
A: The monetary policies are those policies which are enacted by the central bank of a country to…
Q: The spending and taxing policies used by the government to influence the economy refer to 1 monetary…
A: Answer: Correct option: (2) Fiscal policy Explanation: Fiscal policy refers to the policy of…
Q: In the graph that you have drawn in question 1, what is the state of the economy? Using fiscal…
A: The graph depicts the short run and long run aggregate supply curve and aggregate demand curve. In…
Q: During a recession, the government can help the economy by a. decreasing taxes. b. buying…
A: During a recession, the government can help the economy by decreasing taxes as it will allow public…
Q: Why would most economists default usually first to monetary policy for stabilization before using…
A: An economy can be stabilized either by the government of the nation or by the central bank. A major…
Q: Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of…
A: Monetary policy refers to policy that affects the cost and availability of credit in an economy.…
Q: the economy has entered a recession. what are two fiscal and two monetary policy actions that could…
A: Monetary policy is a policy tool implemented by the central bank in order to control the overall…
Q: What is the difference between fiscal and monetary policy? What fiscal and monetary steps can the…
A: The tools of fiscal and monetary policy for keeping the growth of the economy stable include low…
Q: Why should monetary policy and fiscal policy be separately?
A: Fiscal policy: This is the government policy or tool by which it influences the country’s economy…
Q: When the economy slows down heading towards a recession, then the appropriate monetary policy would…
A: During recession, the demand started to decline and unemployment started rising. Monetary policy is…
Q: Explain the difference between fiscal policy and monetary policy. What are some of the reasons these…
A: Macroeconomic policy plans to give a stable economic environment that is helpful for encouraging…
Q: Addressing recession using Fiscal and Monetary Policy tools. Scenario - The US economy is currently…
A: Recession is a situation in the economy, when there is general decline in the economic activity. For…
Q: From a Keynesian point of view, which is more likely to cause a recession: aggregate demand or…
A: Keynesian talked about Aggregate demand, he emphasized more on government intervention to correct…
Q: if you were the leader of a country and you had control of fiscal and monetary policies, what would…
A: Fiscal Policy: The fiscal policy is the use of government revenue (taxes or tax cut) and the…
Q: Analyze monetary policy in order the generate macroeconomic stability
A: Introduction The central bank attempts to preserve price stability by limiting the amount of money…
Q: Start with a brief introduction that explains use of Government policy to control the economy. When…
A: Changes in the number and types of taxes imposed by governments have an impact on the economy.…
Q: Define the following: -Inside lag -Outside lag Which has the longer lag-monetary or fiscal…
A: The policy that depicts the control of the money quantity being available in an economy and the…
Q: *Does monetary or fiscal policy have a longer time lag? Why?
A: Monetary policy is defined as the policy adopted by the central bank of the country to influence the…
Q: How would a Keynesian Economist use Fiscal Policy to fight a Recession? Please do not write about…
A: "Recession means reduction or fall in the economic activity and this fall is visible in real GDP,…
Q: Should Monetary and Fiscal Policymakers Try to Stabilize the Economy? Explain.
A: Yes, facing booms and depression is something wrong for any economy and stability is necessary which…
Q: If a nation’s central bank, such as the US Federal reserve, believes the economy is headed toward a…
A: Meaning of Recession and Expansion: The term recession refers to the state under the business…
Q: Do you think policy makers should attempt to stabilize the economy ? Why ?
A: Every country has its goals and these goals can be achieved by using micro and macro tools in an…
Q: Analyze and compare fiscal and monetary policy in order the generate macroeconomic stability.
A: The policy that makes use of revenue that is collected and expenditures incurred by the government…
Q: In theory, fiscal policy can be as effective in stabilizing the economy as is monetary policy. What…
A: Fiscal policy is the policy that is made to achieve the stability by the government by using its…
Q: A country can use a combination of monetary and fiscal policies to stabilize or control their…
A: The two most well-known mechanisms for influencing a country's economic activity are monetary policy…
Q: A stimulative monetary or fiscal action should increase aggregate demand. What factors may limit the…
A: Answer -
Q: In times of recession, it is the banks who ultimately decide whether a particular business survives…
A: evaluate the effectiveness of current monetary policies Critics argue that stimulus measures like…
Q: Using the AD/AS model construct two graphs that show how a recession can occur? Explain how…
A: A recession is a time of declining economic execution across a whole economy that goes on for a long…
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- Consider an economy currently in recession. Which is NOT a policy move that could assist the economy, as discussed in class? Raising the money supply Raising government spending Lowering bank reserves Lowering interest ratesHow can shipping delays and shortages of intermediate goods cause a recession? Why may these issues lead to a reduction in consumer spending? Consider how consumers change the timing of their purchases to reflect the market.Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of economic fluctuations. In practice, however, there are obstacles to the use of such policies. What are the primary difficulties with using monetary and fiscal policy to stabilize the economy?
- Do you think policy makers should attempt to stabilize the economy ? Why ?Assume an economy is currently operating at point A. What key policy recommendations would you make for an economy like this one that is currently operating at point A? Justify why you believe this is appropriate policy.An increase in household consumption may increase output and the price level. Explain how monetary and fiscal policies can be used to keep the stability of the price level. Use relevant graphs to support your answer.
- Explain in details how high inflation can lead to a recession in several ways.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, as well as the pros and cons of using these tools to combat economic fluctuations. The following graph plots hypothetical aggregate demand (AD), short-run aggregate supply (AS), and long-run aggregate supply (LRAS) curves for the U.S. economy in May 2026. Suppose the government chooses to intervene in order to return the economy to the natural level of output by using policy. Depending on which curve is affected by the government policy, shift either the AS curve or the AD curve to reflect the change that would successfully restore the natural level of output. PRICE LEVEL 150 50 30 130 110 8 70 80 50 20 20 22 24 LRAS 28 AS OUTPUT (Trillions of dollars) AD 28 30 AD ਵੇ ㅁ AS ? Suppose that in May 2026 the government successfully carries out the type of policy necessary to restore the natural level of…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, as well as the pros and cons of using these tools to combat economic fluctuations. The following graph plots hypothetical aggregate demand (AD), short-run aggregate supply (AS), and long-run aggregate supply (LRAS) curves for the U.S. economy in February 2026. Suppose the government chooses to intervene in order to return the economy to the natural level of output by using Depending on which curve is affected by the government policy, shift either the AS curve or the AD curve to reflect the change that would successfully restore the natural level of output. AS 130 110 X AD 70 LRAS 22 24 26 OUTPUT (Trillions of dollars) PRICE LEVEL 150 50 20 28 30 AD 4 AS policy. (? Suppose that in February 2026 the government successfully carries out the type of policy necessary to restore the natural level of…
- 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, as well as the pros and cons of using these tools to combat economic fluctuations. The following graph plots hypothetical aggregate demand (AD), short-run aggregate supply (AS), and long-run aggregate supply (LRAS) curves for the U.S. economy in February 2026. Suppose the government chooses to intervene in order to return the economy to the natural level of output by using (an expansionary/a contractionary) policy. Depending on which curve is affected by the government policy, shift either the AS curve or the AD curve to reflect the change that would successfully restore the natural level of output. Suppose that in February 2026 the government successfully carries out the type of policy necessary to restore the natural level of output described in the previous question. In July 2026,…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, as well as the pros and cons of using these tools to combat economic fluctuations. The following graph plots hypothetical aggregate demand (AD), short-run aggregate supply (AS), and long-run aggregate supply (LRAS) curves for the U.S. economy in January 2026. Suppose the government chooses to intervene in order to return the economy to the natural level of output by using (a contractionary/an expantionary) policy. Depending on which curve is affected by the government policy, shift either the AS curve or the AD curve to reflect the change that would successfully restore the natural level of output. Suppose that in January 2026 the government successfully carries out the type of policy necessary to restore the natural level of output described in the previous question. In March 2026, U.S. imports…Why might “belt-tightening” by consumers in a recession be unwelcome?
