Reference no: EM13984161
Use of discretionary policy to stabilize the economy
Should the government use monetary and fiscal policy in an effort to stabilize the economy? The following questions address the issue of how monetary and fiscal policies affect the economy, and the pros and cons of using these tools to combat economic fluctuations.
The following graph shows a hypothetical aggregate demand curve (AD), short-run aggregate supply curve (AS), and long-run aggregate supply curve (LRAS) for the U.S. economy in March 2020.
Suppose the government decides to intervene to bring the economy back to the natural rate of output by using policy.
Depending on which curve is affected by the government policy, shift either the AS curve or the AD curve to reflect the change that would successfully restore the natural rate of output.
Suppose that in March the government undertakes the type of policy that is necessary to bring the economy back to the natural rate of output given in the previous scenario. In July 2020, consumer confidence increases, leading to an increase in consumer spending. Because of the associated with implementing monetary and fiscal policy, the impact of the government’s new policy will likely once the effects of the policy are fully realized.
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Autonomous consumption and government spending
: Given the following model: Y = C + I + G + (X-M) Question 1 Suppose that: Autonomous Consumption = $500 MPC = 0.75 Taxes = $400 Investment = $500 Government Spending = $1200 Exports = $300 Imports = $500. Suppose that full employment GNP (FE Y) is = ..
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Core competencies and porters competitive force model
: Explain how information systems help companies develop competitive strategies using the Value Chain Model, the concept of synergies, core competencies, and Porters Competitive Force Model.
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Depicted by a downward-sloping demand curve
: In order to be a successful price discriminator, a provider must have a degree of market power (depicted by a downward-sloping demand curve) and meet what other condition(s)? Prospective customers must be categorized according to willingness-to-pay.
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Monetary and fiscal policy in an effort to stabilize economy
: Should the government use monetary and fiscal policy in an effort to stabilize the economy? The following questions address the issue of how monetary and fiscal policies affect the economy, and the pros and cons of using these tools to combat economi..
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Calculate the elasticity of demand for each market
: Suppose a monopolist sells in two distinct markets. The demand for the first mar- ket is given by P1 = 240 − 2Q1 , where Q1 is the quantity demanded and P1 is the price paid by the first group. How much does the monopoly supply in each market and wha..
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Operations of labor markets are the minimum wage law
: Two laws that affect the operations of labor markets are the minimum wage law and the right to work law. Who benefits and who loses from each of these laws?
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Responsibility to dispose of the extrusion machine
: Your company has a customer who is shutting down a production line, and it is your responsibility to dispose of the extrusion machine. The company could keep it in inventory for possible future product and estimates that the reservation value is $ 25..
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What should the manufacturer do to stop losing money
: In the late 1990s, car leasing was very popular in the United States. A customer would lease a car from the manufacturer for a set term, usually two years, and then have the option of keeping the car. Why was the manufacturer losing money on this pro..
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