Advocates of fixed policy rules believe that   Discretionary policies can improve macro outcomes. Appropriate macro policy would include constant fixed-rate increases in the money supply and balanced federal budgets. Due to the problems implementing fiscal policy, the economy would be better off if the Fed controlled discretionary fiscal policy. All of the answers are correct.

Explain the interaction of monetary policy and fiscal policy at full employment

Let’s study the crowding-out effect which is triggered by a discretionary fiscal policy. How does a temporary increase in government purchase affect the interest rate based on the money supply-demand model? Why? Suppose we are having stagflation because of a supply shock. Please show the temporary increase in government purchases can restore the long-run macroeconomic equilibrium using a graph. What is the meaning of the crowding-out effect? Please show the short-run crowding out effect using a graph.

Start with a brief introduction that explains use of Government policy to control the economy. When is it appropriate to use monetary and fiscal policy to stimulate or stabilize the economy? Look at both. When is it inappropriate to use monetary and fiscal policy to stimulate or stabilize the economy? Look at both. What specific fiscal policy tools would you use to stimulate aggregate demand and how? What specific monetary policy tools would you use to stimulate aggregate demand and how? What is your conclusion, should policymakers use the monetary and or fiscal policy, or a combination of both, to stimulate aggregate demand? Explain your reasoning.

In the most recent FOMC meeting, the Federal Reserve increased the Federal Funds rate. By doing this, this suggests the Federal Reserve: a is willing to sacrifice jobs to keep prices stable b is willing to sacrifice higher prices to save jobs c believes the Federal Funds rate is not important d is trying to counter fiscal policy actions

How did the US use countercyclical fiscal policy as a recovery tool during the stock market crash of 2008?

What is supply-side economics? Does it oppose the Classical, Keynesian, or Monetarist theory? How does supply-side economics affect fiscal policy?

The 'automatic mechanism' can best be described as using fiscal or monetary policies to stabilize the economy when it is not at potential. how the economy returns to potential GDP without any policy action. the result of monetary policy implemented by the Fed restoring full employment. how fiscal policy is used to return the economy to its potential.

Why do some economists support some level of inflation over completely stable prices? Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. ? Reduced risk of deflation ? Easier for firms to adjust real wages ? More opportunity for contractionary fiscal policy ? More difficult for firms to adjust real wages ? More opportunity for expansionary monetary policy

In the figure above, assume that output is $10.5 trillion, while potential output is $12 trillion.  If a fiscal stimulus package is implemented quickly, raising output to $12 trillion, while  inflation remains constant at one percent, then the figure implies that the real interest rate will  be ________ percent.  A) 1.5  B) zero  C) one  D) 0.5  E) 2.5