05 Jul Macroeconomic Policy Discussion Questions
Question Description
Macroeconomic Policy
This question includes 2 parts. Please help me finish part one (200-400 words) and do the part 2 later (classmate’s response). I will provide my classmates’ response later with the one doing this assignment in a private message.
As you have learned in the last chapters, policymakers have important decisions to make about whether and how to take actions designed to change conditions in the macroeconomy. This is not an easy task! There are many considerations – Is the economy doing well on its own? If not, would policy help? What kind of policy – monetary, fiscal, both? Is the economy in an expansion or a recession? Should we engage in expansionary policy or contractionary policy? What particular type of action should we take? If monetary, do we buy bonds or sell bonds? If fiscal – should we change taxes or government spending? And should the change be an increase or a decrease? For all policy actions, remember how important timing is to taking the appropriate action in a way that will accomplish the intended outcome (to the extent that policymakers can influence it).
Take a few moments to look at this video review of macroeconomic policy hosted by your friend, and mine, Mr. Clifford. Take the time to test yourself before you take on this last discussion assignment. (Remember that the AS curve that Mr. Clifford refers to shifting as the economy self-corrects is the SRAS. With no policy, the automatic adjustment mechanism is the factor at work in the economy.)
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