Firstly, explain how monetary and fiscal policy is implemented and how they can be used to influence GDP and the price level.

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Suppose the economy begins at full employment. Label this starting point as point "1." Then, suppose that a long strike by coal miners reduces the coal supply and increases the price of coal. Show the effects on your graph and label the new equilibrium point "2." Lastly, suppose our government wants the economy to return to full-employment as quickly as possible. Should the government intervene? If so, show the impact of successful fiscal policy on your graph. Label this new equilibrium point "3."

Explain the difference between fiscal policy and monetary policy. What are some of the reasons these macroeconomic policies are used? Elaborate on reasons these policies are used.

Given all the complications that can result with fiscal policy, is fiscal policy still considered an effective policy tool for stabilizing business cycle fluctuations? - While some economists believe it is best not to engage in fiscal policy at all and instead focus on monetary policy, most economists believe that fiscal policy has a place in stabilization policy. Currently, most economists believe that ( fiscal, monetary ) policy is useful to 'push' the economy in a certain direction, but not necessarily 'fine-tune it' to a particular outcome. They argue that if ( fiscal, monetary ) policy is keeping the economy relatively stable, ( fiscal, monetary ) policy should remain fairly neutral. In cases where recessions are deep and long-lasting or inflation threatens to rapidly rise, major adjustments in ( fiscal, monetary ) policy may be helpful to stabilize the economy. Economists do warn that the long-term effects of short-term applications of fiscal policy should be considered to ensure…

No. 6 Consider the following equations for this particular economy. C = 100+ 0.75Yd I = 150 G = 250 T = 200 X = 100 Q = 0.25Yd a. What is the equilibrium level of income of this economy? Is the trade balance in deficit or surplus? By how much? b. Suppose there is an increase in government expenditures by 50. What is the effect on the equilibrium level of income? What is the effect on the trade balance? Explain your answers. C. This question is independent of Question (b). Suppose exports increase by 50. Compared to you answer in (a), what is the effect on the equilibrium level of income and on the trade balance? Explain your answers.

7. Agreement and disagreement among economists Suppose that Paolo, an economist from a research institute in Alberta, and Sharon, an economist from a public television program, are arguing over budget deficits. The following dialogue shows an excerpt from their debate: Sharon: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation. Paolo: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits. Sharon: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively. The disagreement between these economists is most likely due to Despite their differences, with which proposition are two economists chosen at random most likely to agree? O Employers should not be restricted from outsourcing work to foreign nations. O Central banks should focus more on maintaining low…

In mid-2001, the Bush administration won congressional approval for lower income tax rates. One stipulation of this rate cut was that the rates also be applied retroactively to taxes from the year 2000.   Question: Would you consider this fiscal policy to be demand-side focused, supply-side focused, or both? Explain your response.

What is the role of the Council Economic Advisers (CEA) as it relates to the effectiveness of the recent U.S. fiscal policy? Find the names and university affiliations of the present members of the CEA.   (This may be a helpful website for finding sum of the information relating to the question. https://www.whitehouse.gov/cea/staff)

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