Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 15, Problem 7CQ
To determine
Explain the practical problems that limit the use of the discretionary monetary and fiscal policy.
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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?
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Please provide two similarities and two differences between fiscal policy and monetary policy
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Economics: Private and Public Choice (MindTap Course List)
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- Why do economists often disagree about the conduct of macroeconomic stabilization policy?arrow_forwardDiscuss some of the difficulties that may arise from enacting and carrying out fiscal policy and why some economists believe monetary policy is superior as a stabilizing mechanism.arrow_forwardWhat is the Liquidity Trap? Discuss the effectiveness of fiscal and monetary policy in this context.arrow_forward
- 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.arrow_forwardDescribe the pros and cons of stabilization policy and take a stance are you an activist or nonactivist and why?arrow_forwardIn 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?arrow_forward
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- 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?arrow_forwardwhat is a fiscal policy what is a monetary policy -give an example in todays economy. thanks for your timearrow_forwardare anti-inflationary policies effective when there are adverse supply shocks? which monetary or fiscal policy would be more effective?arrow_forward
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