Statements of expansionary fiscal and monetary policies

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Reference no: EM1314471

Currently, the extent of our economic difficulties has caused the economic policymakers to choose fiscal and monetary policies that are both expansionary. Though many economists believe this mix of policy is appropriate to our current circumstances, there are concerns of problems that these policies might create. Analyze the below statements.

a. Though these policies have some benefits, none of these benefits offer solace to the problem of bulging federal budget deficits and the increased debt burden we are placing on our future American taxpayers, namely our children.

b. These policies are likely to stoke the fires of inflation, making it a more challenging problem in the future.

c. These policies will restrict private, business investment spending given their impact on credit and interest rates, thereby limiting future long-term economic growth.

d. These policies will likely cause a weakening in the American dollar as a result.

Reference no: EM1314471

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