Reference no: EM131169231
Fiscal policy and monetary policy are the tools the government can use to try to influence the financial sector. For example, the government can implement policies, such as tax cuts, to attempt to stimulate a sluggish economy. For example, you may be familiar with the first-time homebuyer’s credit, which the government offered to help stimulate the real estate market. Have you ever benefited from a tax cut?
For this assignment, you will participate in a discussion about how monetary policy and fiscal policy affect aggregate-demand curves.
Scenario The federal government and the Fed usually try to coordinate their efforts in order to keep the economy stable. However, there are times when the government and the Fed work against each other without intending to. For example, in 2012, Congress passed a universal healthcare plan called The Patient Protection and Affordable Care Act. This law was passed during a time when the Fed was working to stimulate economic spending through monetary policy. However, taxpayers knew that the new law would eventually result in higher taxes. Some economists argued that the passage of the law was one of the reasons that monetary policies had little effect as businesses and consumers continued to hold their money in anticipation of increased taxes.
Instructions
1. In a post to the discussion, respond to the following:
In what ways do you think The Patient Protection and Affordable Care Act might affect the economy? Explain your answer.
In what ways do you think this type of program affects the aggregate-demand curve? The aggregate-supply curve? Explain your answers.
|
Use of fiscal policy or monetary policy
: In the midst of a recession, if you could choose only one option to stimulate the economy, would you recommend the use of fiscal policy or monetary policy? [Your response should include an explanation of the pros and cons of each policy in order to s..
|
|
The main difference in the economic model
: We started the course with a look at NBER data on business cycles. Specifically, we saw prior to 1945 that recessions lasted on average about 2 years, and after 1945 the average recession was cut in half (to just under 1 year). Based on what you’ve l..
|
|
Spend on the lawyer to achieve the efficient outcome
: Suppose your neighbour likes to repair motorcycles in his front yard during evenings and on weekends, and he earns $400 per week from this work. If your neighbour has a right to operate this business, what is the efficient outcome? If you have a righ..
|
|
In perfectly competitive market there are few benefits
: In perfectly competitive market there are few benefits but still more benefits of the PC model pertain to individual choice and Liberty .what historical paradox of social structure does the perfectly competitive equilibrium resolve ?
|
|
Fiscal policy and monetary policy are the tools government
: Fiscal policy and monetary policy are the tools the government can use to try to influence the financial sector. For example, the government can implement policies, such as tax cuts, to attempt to stimulate a sluggish economy.
|
|
Greed is good in the context of perfectly competitive market
: Discuss the notion that "greed is good" in the context of perfectly competitive market and in that of a monopoly .how much greed manifest itself in a perfectly competitive market in long run equilibrium
|
|
What will be the equilibrium price
: Industry demand is given by: QD = 1000 - P All firms in the industry have identical and constant marginal and average costs of $50 per unit. If the industry is perfectly competitive, what will industry output be? What will be the equilibrium price? W..
|
|
The oligopoly market structure model is characterized
: The oligopoly market structure model is characterized by:
|
|
Company marginal cost curve
: Morgan company’s marginal cost curve is: MC = 4+3Q Where MC is marginal cost and Q is the number of units of its product. The price of a unit of its product is $3. A consultant hired by the company argues based on the evidence, the firm would make mo..
|