Explain the economic policy that will stabilize the economy and achieve economic growth .

Question

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Answer 1

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 15, Problem 1CQ

To determine

Explain the economic policy that will stabilize the economy and achieve economic growth.

Expert Solution & Answer

Explanation of Solution

The role of the government and the central bank is necessary to stabilize the economy and achieve economic growth. If an economy faces recession, considering the role of the government, the government would adopt an expansionary fiscal policy to stimulate the economic activity. The tools of the expansionary fiscal policy are government spending and cut-down tax rate. Alternatively, if the economy faces inflation, the government would reduce lending and increase the tax rate. In case of the central bank, they adopt expansionary monetary policy during recession and contractionary monetary policy during inflation. The monetary tools are purchase and sale of bonds and stocks in the open market, decrease and increase in the interest rate, and decrease and increase in the reserve requirements. Therefore, during the period of recession, the expansionary fiscal policy and expansionary monetary policy will be suggested to stabilize and increase the growth of the economy and in inflation, a contractionary fiscal policy and contractionary monetary policy will stabilize the economy and achieve economic growth.

Economics Concept Introduction

Expansionary fiscal policy: Expansionary fiscal policy increases the government purchases and decreases the taxes to increase the aggregate demand and expanding output.

Contractionary fiscal policy: Contractionary fiscal policy is a fiscal policy of the government in which the government spending decreases and the tax increases.

Expansionary monetary policy: Expansionary monetary policy is a central bank policy that stimulates the economy by decreasing the interest rate, reducing the reserve requirement, and increasing the money supply.

Contractionary monetary policy: Contractionary monetary policy is a monetary policy that is implemented by the central bank to ensure price stability by targeting the interest rate, which is a reduction in the money supply and an increase in the interest rate.

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Answer 2

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 15, Problem 1CQ

To determine

Explain the economic policy that will stabilize the economy and achieve economic growth.

Expert Solution & Answer

Explanation of Solution

The role of the government and the central bank is necessary to stabilize the economy and achieve economic growth. If an economy faces recession, considering the role of the government, the government would adopt an expansionary fiscal policy to stimulate the economic activity. The tools of the expansionary fiscal policy are government spending and cut-down tax rate. Alternatively, if the economy faces inflation, the government would reduce lending and increase the tax rate. In case of the central bank, they adopt expansionary monetary policy during recession and contractionary monetary policy during inflation. The monetary tools are purchase and sale of bonds and stocks in the open market, decrease and increase in the interest rate, and decrease and increase in the reserve requirements. Therefore, during the period of recession, the expansionary fiscal policy and expansionary monetary policy will be suggested to stabilize and increase the growth of the economy and in inflation, a contractionary fiscal policy and contractionary monetary policy will stabilize the economy and achieve economic growth.

Economics Concept Introduction

Expansionary fiscal policy: Expansionary fiscal policy increases the government purchases and decreases the taxes to increase the aggregate demand and expanding output.

Contractionary fiscal policy: Contractionary fiscal policy is a fiscal policy of the government in which the government spending decreases and the tax increases.

Expansionary monetary policy: Expansionary monetary policy is a central bank policy that stimulates the economy by decreasing the interest rate, reducing the reserve requirement, and increasing the money supply.

Contractionary monetary policy: Contractionary monetary policy is a monetary policy that is implemented by the central bank to ensure price stability by targeting the interest rate, which is a reduction in the money supply and an increase in the interest rate.

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Answer 3

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 15, Problem 1CQ

To determine

Explain the economic policy that will stabilize the economy and achieve economic growth.

Expert Solution & Answer

Explanation of Solution

The role of the government and the central bank is necessary to stabilize the economy and achieve economic growth. If an economy faces recession, considering the role of the government, the government would adopt an expansionary fiscal policy to stimulate the economic activity. The tools of the expansionary fiscal policy are government spending and cut-down tax rate. Alternatively, if the economy faces inflation, the government would reduce lending and increase the tax rate. In case of the central bank, they adopt expansionary monetary policy during recession and contractionary monetary policy during inflation. The monetary tools are purchase and sale of bonds and stocks in the open market, decrease and increase in the interest rate, and decrease and increase in the reserve requirements. Therefore, during the period of recession, the expansionary fiscal policy and expansionary monetary policy will be suggested to stabilize and increase the growth of the economy and in inflation, a contractionary fiscal policy and contractionary monetary policy will stabilize the economy and achieve economic growth.

Economics Concept Introduction

Expansionary fiscal policy: Expansionary fiscal policy increases the government purchases and decreases the taxes to increase the aggregate demand and expanding output.

Contractionary fiscal policy: Contractionary fiscal policy is a fiscal policy of the government in which the government spending decreases and the tax increases.

Expansionary monetary policy: Expansionary monetary policy is a central bank policy that stimulates the economy by decreasing the interest rate, reducing the reserve requirement, and increasing the money supply.

Contractionary monetary policy: Contractionary monetary policy is a monetary policy that is implemented by the central bank to ensure price stability by targeting the interest rate, which is a reduction in the money supply and an increase in the interest rate.

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Answer 4

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 15, Problem 1CQ

To determine

Explain the economic policy that will stabilize the economy and achieve economic growth.

Expert Solution & Answer

Explanation of Solution

The role of the government and the central bank is necessary to stabilize the economy and achieve economic growth. If an economy faces recession, considering the role of the government, the government would adopt an expansionary fiscal policy to stimulate the economic activity. The tools of the expansionary fiscal policy are government spending and cut-down tax rate. Alternatively, if the economy faces inflation, the government would reduce lending and increase the tax rate. In case of the central bank, they adopt expansionary monetary policy during recession and contractionary monetary policy during inflation. The monetary tools are purchase and sale of bonds and stocks in the open market, decrease and increase in the interest rate, and decrease and increase in the reserve requirements. Therefore, during the period of recession, the expansionary fiscal policy and expansionary monetary policy will be suggested to stabilize and increase the growth of the economy and in inflation, a contractionary fiscal policy and contractionary monetary policy will stabilize the economy and achieve economic growth.

Economics Concept Introduction

Expansionary fiscal policy: Expansionary fiscal policy increases the government purchases and decreases the taxes to increase the aggregate demand and expanding output.

Contractionary fiscal policy: Contractionary fiscal policy is a fiscal policy of the government in which the government spending decreases and the tax increases.

Expansionary monetary policy: Expansionary monetary policy is a central bank policy that stimulates the economy by decreasing the interest rate, reducing the reserve requirement, and increasing the money supply.

Contractionary monetary policy: Contractionary monetary policy is a monetary policy that is implemented by the central bank to ensure price stability by targeting the interest rate, which is a reduction in the money supply and an increase in the interest rate.

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Answer 5

Chapter 15, Problem 1CQ

To determine

Explain the economic policy that will stabilize the economy and achieve economic growth.

Expert Solution & Answer

Explanation of Solution

The role of the government and the central bank is necessary to stabilize the economy and achieve economic growth. If an economy faces recession, considering the role of the government, the government would adopt an expansionary fiscal policy to stimulate the economic activity. The tools of the expansionary fiscal policy are government spending and cut-down tax rate. Alternatively, if the economy faces inflation, the government would reduce lending and increase the tax rate. In case of the central bank, they adopt expansionary monetary policy during recession and contractionary monetary policy during inflation. The monetary tools are purchase and sale of bonds and stocks in the open market, decrease and increase in the interest rate, and decrease and increase in the reserve requirements. Therefore, during the period of recession, the expansionary fiscal policy and expansionary monetary policy will be suggested to stabilize and increase the growth of the economy and in inflation, a contractionary fiscal policy and contractionary monetary policy will stabilize the economy and achieve economic growth.

Economics Concept Introduction

Expansionary fiscal policy: Expansionary fiscal policy increases the government purchases and decreases the taxes to increase the aggregate demand and expanding output.

Contractionary fiscal policy: Contractionary fiscal policy is a fiscal policy of the government in which the government spending decreases and the tax increases.

Expansionary monetary policy: Expansionary monetary policy is a central bank policy that stimulates the economy by decreasing the interest rate, reducing the reserve requirement, and increasing the money supply.

Contractionary monetary policy: Contractionary monetary policy is a monetary policy that is implemented by the central bank to ensure price stability by targeting the interest rate, which is a reduction in the money supply and an increase in the interest rate.

Answer 6

Chapter 15, Problem 1CQ

To determine

Explain the economic policy that will stabilize the economy and achieve economic growth.

Expert Solution & Answer

Explanation of Solution

The role of the government and the central bank is necessary to stabilize the economy and achieve economic growth. If an economy faces recession, considering the role of the government, the government would adopt an expansionary fiscal policy to stimulate the economic activity. The tools of the expansionary fiscal policy are government spending and cut-down tax rate. Alternatively, if the economy faces inflation, the government would reduce lending and increase the tax rate. In case of the central bank, they adopt expansionary monetary policy during recession and contractionary monetary policy during inflation. The monetary tools are purchase and sale of bonds and stocks in the open market, decrease and increase in the interest rate, and decrease and increase in the reserve requirements. Therefore, during the period of recession, the expansionary fiscal policy and expansionary monetary policy will be suggested to stabilize and increase the growth of the economy and in inflation, a contractionary fiscal policy and contractionary monetary policy will stabilize the economy and achieve economic growth.

Economics Concept Introduction

Expansionary fiscal policy: Expansionary fiscal policy increases the government purchases and decreases the taxes to increase the aggregate demand and expanding output.

Contractionary fiscal policy: Contractionary fiscal policy is a fiscal policy of the government in which the government spending decreases and the tax increases.

Expansionary monetary policy: Expansionary monetary policy is a central bank policy that stimulates the economy by decreasing the interest rate, reducing the reserve requirement, and increasing the money supply.

Contractionary monetary policy: Contractionary monetary policy is a monetary policy that is implemented by the central bank to ensure price stability by targeting the interest rate, which is a reduction in the money supply and an increase in the interest rate.

Answer 7

Chapter 15, Problem 1CQ

To determine

Explain the economic policy that will stabilize the economy and achieve economic growth.

Answer 8

Expert Solution & Answer

Explanation of Solution

The role of the government and the central bank is necessary to stabilize the economy and achieve economic growth. If an economy faces recession, considering the role of the government, the government would adopt an expansionary fiscal policy to stimulate the economic activity. The tools of the expansionary fiscal policy are government spending and cut-down tax rate. Alternatively, if the economy faces inflation, the government would reduce lending and increase the tax rate. In case of the central bank, they adopt expansionary monetary policy during recession and contractionary monetary policy during inflation. The monetary tools are purchase and sale of bonds and stocks in the open market, decrease and increase in the interest rate, and decrease and increase in the reserve requirements. Therefore, during the period of recession, the expansionary fiscal policy and expansionary monetary policy will be suggested to stabilize and increase the growth of the economy and in inflation, a contractionary fiscal policy and contractionary monetary policy will stabilize the economy and achieve economic growth.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Expansionary fiscal policy: Expansionary fiscal policy increases the government purchases and decreases the taxes to increase the aggregate demand and expanding output.

Contractionary fiscal policy: Contractionary fiscal policy is a fiscal policy of the government in which the government spending decreases and the tax increases.

Expansionary monetary policy: Expansionary monetary policy is a central bank policy that stimulates the economy by decreasing the interest rate, reducing the reserve requirement, and increasing the money supply.

Contractionary monetary policy: Contractionary monetary policy is a monetary policy that is implemented by the central bank to ensure price stability by targeting the interest rate, which is a reduction in the money supply and an increase in the interest rate.

Answer 12

Ch. 15 - Prob. 1CQ Ch. 15 - Prob. 2CQ Ch. 15 - Prob. 3CQ Ch. 15 - Prob. 4CQ Ch. 15 - Prob. 5CQ Ch. 15 - Prob. 6CQ Ch. 15 - Prob. 7CQ Ch. 15 - Prob. 8CQ Ch. 15 - Prob. 9CQ Ch. 15 - Prob. 10CQ

Explain the economic policy that will stabilize the economy and achieve economic growth .

Explain the economic policy that will stabilize the economy and achieve economic growth.

Explanation of Solution

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Chapter 15 Solutions