Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280601
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Chapter 7, Problem 1DQ
To determine
To describe: The various objectives of long run growth policy in comparison with short run stabilization policy.
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Macroeconomics: Principles and Policy (MindTap Course List)
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- Demand management policies do not matter for growth in the long run as long as there is productivity growth. Why or why not? Solve in 20 minarrow_forward"In an economy experiencing rapid technological advancements, which of the following policy measures is most likely to ensure equitable growth and prevent an increase in income inequality?" a) Reducing income taxes for the highest earners to encourage more investment and economic growth. b) Implementing a universal basic income (UBI) that provides all citizens with a regular, unconditional sum of money, regardless of employment status. c) Focusing solely on monetary policy to control inflation, without direct interventions in the labor market. d) Increasing tariffs on imported goods to protect domestic industries and jobs.arrow_forwardhelparrow_forward
- In the context of development priorities, what are the relative roles of central banks , commercial banks, development banks, informal and unorganized sources of credit, and microfinance?arrow_forwardPlease help reply to this discussion . needs to be a minimum of 150 words. thank you "Free market economies stimulate economic growth because the entrepreneur has incentive to work, that is, profit. When a business owner can obtain the rewards of their hard work, they are instantly more motivated than if they cannot. In a state-directed economy, whether or not the business is doing well, the person running the business will make the same amount of money. If the business does really well, the person in charge will not receive the same benefit as they would if it was their own enterprise. Another reason that free market economies stimulate growth is because they allow supply and demand to create competition, which helps ensure that the best goods and services are provided to consumers (Investopedia, 2023). Without competition, a company can monopolize a market with little incentive to innovate their product. People may still purchase said product but that's because it's the only one…arrow_forwardWhat question is Convergence Theory attempting to answer? What is Convergence Theory? Make sure and explain productivity levels vs. productivity growth rates and how these concepts relate to developed and developing countries.arrow_forward
- In a developing economy that primarily relies on agriculture, the government decides to implement a series of reforms aimed at liberalizing the financial sector, including easing restrictions on foreign bank entry. What is the most likely short-term impact of these reforms on the agricultural sector's access to credit? A) Increased access to credit for the agricultural sector due to enhanced competition in the banking sector. B) Decreased access to credit for the agricultural sector as foreign banks focus on more profitable urban and industrial clients. C) No significant change in access to credit for the agricultural sector, as foreign banks have minimal impact on local lending. D) A shift in credit allocation from large agricultural businesses to small-scale farmers due to diversified lending practices of foreign banks.arrow_forwardMany developed countries experience Business Cycle. Explain the fiscal and monetary policies which are used in a country to cope up with the economic ‘slow down'.arrow_forwardThe global economy has seen significant changes since the banking crisis in 2008. Many economies have gone through large-scale austerity programs to reduce deficits. How has this affected the business organizational structure? How has employment and personal income been affected?arrow_forward
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