Which of the following statements would most likely be made by someone following New Classical economic Multiple Choice A set of contractionary monetary policies would help to reduce the inflation rate. The economy just experienced a demand shock, the markets will correct to reduce unemployment.
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- Please no written by hand solutions Suppose you are the chief economist in Econland and the current unemployment rate is 2 percent and the current inflation rate is 20 percent. List one MONETARY policies and two FISCAL policies that you might propose to fix the problem if you believed that government intervention, in this case, is appropriate.Which of the following supports the argument for hands-off policy? A. Monetary policy does not impact the economy. B. Fiscal policy does not impact the economy. C. Fine-tuning is not compatible with our design capabilities. D. The economy has been fairly stable since World War II.How were the Keynesian, Monetarist and New Classical theories of the economy synthesized to develop the New Keynesian Economics?
- The monetary policy has two basic goals: to promote “maximum” sustainable output and employment and to promote “stable” prices (Federal Reserve Bank of San Franciso). Making these two goals possible is based off of more than just monetary. Technology is now included because technology can replace employment. If people decide to save, it can affect both employment and the goods that can be reduced. There are many other things that can affect the maximizing of sustainable output. The cause-effect chain through is that policy can have an effect on banks and money supply. The monetary policy also has an effect the way consumers spending and the interest rates that are given by banks. It can also affect the way people invest. The major strengths of monetary policy is that it stable prices. When inflation rises faster than expected, the Fed may sell government bonds to take money out of circulation or raise short-term interest rates (Federal Reserve Bank of San…How does high inflation lead to a recession in the country? Explain the role of the government and the central bank to address the economic recession problem by using appropriate fiscal and monetary policies. Are there any potential problems with such policies?Should Monetary and Fiscal Policymakers Try to Stabilize the Economy? Explain.
- In detail, explain how high inflation can lead to a recession in several ways.The classical theory of inflation indicates that inflation is a monetary phenomenon. Why?The use of monetary policy is highly debated among classical and Keynesian economists. Where do they agree and where do they disagree with respect to monetary policy?
- If the market is in a recession (bust), what monetary and fiscal policies could the government use to heat it up?Monetary and fiscal policy play important roles in economic stimulation and or stabilization in what way and explain,Read the articles below and answer the following question: Economists are rethinking monetary and fiscal policy. That’s a potentially positive development. and RETHINKING MONETARY POLICY IN A CHANGING WORLD Why is it important to rethink fiscal and monetary policies? Justify your answers using the evidences provided in the article and relevant other resources.