Analyse the impact of these events on the price level and total output of an economy in the short term. If policymakers were to use monetary policy to actively stabilize the economy, in which direction should they move the money supply and interest rate and show the effects of these policies? Please discuss your answers with appropriate graphs. (a) The government raises taxes and reduces expenditures to balance its budget. (b) Enterprises in the economy are pessimistic about the economy in the future. - (c) Foreigners increase their taste for domestically produced beef. -

Review the rubric to make sure you understand the criteria for earning your grade. Read the articles An Update on the Economy and Monetary Policy and Recent and Near-Term Fiscal Policy Write a five- to six-page paper answering the following regarding fiscal and monetary policy changes: Explain the key aspects of today’s monetary policy and how they are affecting GDP and aggregate demand/aggregate supply. Explain the key aspects of today’s fiscal policy and how they are affecting GDP and aggregate demand/aggregate supply. Are these policies being well coordinated today? In essence, are they both working in unison to address current economic conditions? Explain. What are these policies’ effects on aggregate supply and aggregate. Do understand they affect supply as well as demand. You must use a minimum of five sources for your research paper, at least three of which are scholarly. Use proper spelling, grammar, and APA formatting for your analysis paper. When you have completed your…

(a) Suppose that, in a liquidity trap, bank reserves are less liquid than government debt. If the central bank conducts an open market sale of government debt, what will be the effect on the price level? Use a diagram, explain your results. (b) Suppose that there is a decrease in the price of housing, which the central bank judges is a temporary asset price decrease. In the New Keynesian model, determine the central bank's optimal response to this asset price increase, using diagrams. (c) Suppose initially that inflation is at the central bank's target and the output gap is zero. Then, government spending goes up. Determine, with the aid of diagrams, how the degree of price stickiness affects the central bank's optimal response and explain your results.

Which of the following supports the argument for hands-off policy? A. Monetary policy does not impact the economy. B. Fiscal policy does not impact the economy. C. Fine-tuning is not compatible with our design capabilities. D. The economy has been fairly stable since World War II.

If the U.S. government's budget deficits are increasing aggregate demand, and the economy is producing at a level that is substantially less than potential GDP, then: a) government borrowing is likely to crowd out private investment. b) an inflationary increase in the price level is in real danger. c) the central bank might react with an expansionary monetary policy. d) higher interest rates will crowd out private investment.

Use the given scenarios and the information you have learned about Fiscal and Monetary policy to complete the questions that follow The economy of Andorra is currently experiencing unemployment rates of 5% while economic growth is stagnating at 2%. Naomi recently lost her job as a systems analyst and is struggling to find new employment in the current economic conditions. Congress and the President also notice this change in the economy and decide to take steps to correct it. They can use their 2 tools in the following ways: a.      What will the federal government do to taxes?    b.     What will the federal government do to government spending? c.      What impact will this have on consumer spending?

Explain whether policy makers should be more concerned about the economy going into a recession or facing high inflation and why.

When an economy dips into a recession, consumers will often be relatively pessimistic about the future for an extended period time. How will this pesimism affect the speed and strength of the recovery?

X 8. Using policy to stabilize the economy The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to whether the government should attempt to stabilize the economy. Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. Businesses make investment plans many months in advance. Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. The current tax system acts as an automatic stabilizer. Which of the following are examples of automatic stabilizers? Check all that apply. Unemployment insurance benefits Corporate income taxes The discount rate C O 1:24 PM 4/29/2022

Provide some reasons why people (and societies) discount future benefits and costs (i.e., future monetary values)?