Consumer and investor optimism and pessimism

Assignment Help Business Economics

Reference no: EM13853587

Consumer and investor optimism and pessimism matter a great deal in the economy. Suppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country.

If policymakers do nothing, what will happen to aggregate demand? What should the Federal Reserve do if it wants to stabilize aggregate demand? If the Federal Reserve does nothing, what do you think might Congress (fiscal policy) do to stabilize aggregate demand? Why do you think consumer and investor confidence affect AD and hence the economy?

Reference no: EM13853587

Questions Cloud

Money creation and open market operations : Briefly explain in words how the “money multiplier” is supposed to work. As we discussed in class, the Fed has not used money supply targets as a basis for open market operations since the early 1980s. What does the Fed use as a target instead? What ..

What is a meaningful life : What is a "meaningful life"? Is it a life marked by great achievements, by the accumulation of great wealth, by fame? Or is a meaningful life more complicated than the actions we take, the jobs we do, the opinions of others, and even the money we ear..

Money definitions : Money Definitions. To answer the following questions, refer to the money definitions and relationships 1: Total currency = (currency in circulation) + (vault cash) 2. Total reserves = (vault cash) + (reserve deposits) 3. Monetary Base (MB) = (currenc..

Debated areas in economics is balancing the budget : One of the most debated areas in economics is balancing the budget. The major contention is on the timing of the policy. If the government were to operate under a strict balanced-budget rule, what do you think would it have to do in a recession? Shou..

Consumer and investor optimism and pessimism : Consumer and investor optimism and pessimism matter a great deal in the economy. Suppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country.

Trade off between inflation rate and unemployment rate : If you were macroeconomic policymaker, how do you balance the short-run trade off between inflation rate and unemployment rate? Explain. What is the historical relationship between rates of unemployment and inflation in the U.S. economy? What are the..

Contractionary and expansionary monetary policy : What is the difference between contractionary and expansionary monetary policy? What is the difference between contractionary and expansionary fiscal policy? How does each policy affect the AD in the economy? What are the benefits and major problems ..

Deviating is lower with the price protection plan in effect : In its rivalry with Westinghouse, General Electric instituted a "price protection" plan. This plan stated that if GE lowered its price, it would rebate the price difference to its past customers. Show that this plan makes collusion between GE and Wes..

Market for student housing after control is enacted : The city council of a small college town decides to regulate rents in order to reduce student living expenses. Suppose the annual market clearing rent for a two bedroom apartment has been $700 per month and that rents were expected to increase to $90..

User Account

All Pages