uring a recession, fiscal policy measures to bring the economy back to long-run equilibrium can include Select one: a. all answers are correct b. an increase in the exchange rate c. temporary wage subsidy d. a decrease in interest ra

uring a recession, fiscal policy measures to bring the economy back to long-run equilibrium can include Select one: a. all answers are correct b. an increase in the exchange rate c. temporary wage subsidy d. a decrease in interest ra

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For the first one I’m not sure if I’m wore to if the reason and for the second one I just don’t know
If the dollar falls in value compared to other currencies, what will happen in the United States? a. A decrease in aggregate supply b. A decrease in aggregate demand c. An increase in aggregate supply d. A decrease in the U.S. price level
1. What are so-called heterodox adjustment programs? Are they a sound long-term approach? 2. Use the IS/LM/BP graph to illustrate the effects of a revaluation. Show the fiscal and monetary policy changes that would make it more likely that a revaluation will succeed in eliminating a payments surplus.
Fiscal and Monetary Policies a. Write down the relationship between Budget Deficits, Debt, Government Spending and Taxes as a ratio to GDP. Explain the four independent variables that affect the ratio of Debt to GDP and the direction of its movement b. Explain the difference between policy rule and policy discretion in monetary policy. Please provide examples.
Keynes once said, “Look after the unemployment, and the deficit will look after itself”. Explain what he meant and evaluate whether he was right.
Assume that the economy is operating with falling real GDP and higher than usual unemployment. What policy might the government pursue? (assume government chooses independent monetary policy and free flows of capital) A Government chooses to borrow on foreign markets B Government lowers tax rates Government increases taxes Government lowers currency exchange rate to encourage exports
Austrians would support the following policies as a means for more quickly ending the recession A. abolishing Fed open market operations and freezing the monetary base B. freezing prices and wages at their current levels instead of trying to reflate them back to their former level during the boom C. raising taxes in order to reduce government deficits D. both A and B
If Brexit measures and Covid-19 restrictions result in a recession then how can the UK government and Bank of England fix this with both fiscal and monetary policy?
Read the following extract about an aspect of the UK in 2013 and decide whether it is describing a short-run, medium-run or long-run policy challenge. 'The International Monetary Fund is advising the chancellor to defer the UK cuts programme and instead stimulate the faltering economy: hit the austerity pause button; invest more in social housing, schools and road repairs. Growth is more important right now than deficit reduction. Couched in suitably polite language, that was the uncomfortable message from the International Monetary Fund to George Osborne. State A, B or C A: Short-run B: Medium-run C: Long-run
A) Discuss, with examples, factors or events that might shift the short run aggregate supply curve. B) Imagine an economy is in long run equilibrium. Now suppose that firms experience an increase in their cost of production (say, due to a natural disaster). i. Explain, with graphs, the macroeconomic impact of such an increase in production costs. ii. Describe how policymakers could use fiscal policy to counteract the effects of increased cost of production.
In Country B, the current unemployment rate is lower than the natural rate of unemployment. A. Draw a correctly labeled graph of the long run and short run Phillips Curve. Label the current short run equilibrium point A. B. Identify a fiscal policy action that will return the economy to full employment. C. Draw a correctly labeled graph of the loanable funds market. Show the effect of the fiscal policy action you selected in Part B on the real interest rate in the short run.