In 2019 the federal government decreased interest rates for banks three times. Shortly after, POTUS tweeted the following Would be so00 great if the FED would further lower interest rates and quantitative ease. The Dollar is very strong against other currencies and there is almost no inflation. This is the time to do it. Exports would zoom! December 17, 2019 A. Define the type of economic policy inferred by the scenario and describe how it impacts the economy. B. Describe why POTUS has no power to control the implied power inferred to by the scenario above. C. Describe how a change in political party leadership could effect the outlined scenario above.

In 2019 the federal government decreased interest rates for banks three times. Shortly after, POTUS tweeted the following Would be so00 great if the FED would further lower interest rates and quantitative ease. The Dollar is very strong against other currencies and there is almost no inflation. This is the time to do it. Exports would zoom! December 17, 2019 A. Define the type of economic policy inferred by the scenario and describe how it impacts the economy. B. Describe why POTUS has no power to control the implied power inferred to by the scenario above. C. Describe how a change in political party leadership could effect the outlined scenario above.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Macro Economics 1. Explain how the effectiveness of fiscal and monetary policy depends on whetherthe policy change is initiated at a low or high level of output relative to full-employment output. Make sure to provide your answer with the relevant graphsand mathematical equations.
Using economic concepts, discuss the impact of the following events on the equilibrium price level and putput:a. In an effort to inflation, the Reserve of Australia decides to implement contractionary monetary policy.b. In an effort to fight economic recession Australian Government decides to increase spending.c. Due to the outbreak of disease in Asia, shipments of input products from Asia to Australia have decreased significantly.
1..what is globalization? how do you think it might have affected the economy over the past decade? 2.. What is the formula for calculating elasticity?
Q3.Monetary and fiscal policy to manage the economy and growth The small industrial economy of Belgand wants to have FEWPS (full-employment with price stability). The economy has the following characteristics (millions of Belgmarks) "i" denoted interest rate. The equilibrium output is currently: Ya* Marginal propensity to consume MPC = Asset Demand Interest-determined 8000 part of desired investment I(i) | 100 | 200 250 for Money %3D Md | 160 240 0.8 12 12 Full employment level of output (Potential GDP) Yp The money supply is 520. Banks must keep a 12.5% required reserve ratio (RR) against deposits. No Excess reserves. 11 11 7000 10 320 10 222 0.125 8. 9. 400 9. 300 440 8. 350 480 520 400 6. 6 500 700 Interest-determined part of investment "I(i)" and the demand for money "Md" are shown to the right. The money supply is defined as "demand deposits" (ignore transaction demand). 1) Sketch and label economic conditions on graph. 2) Calculate the multiplier and the income and Aggregate…
Determinants of aggregate demand
Suppose the evening news anchor announces that "The Bank of Canada Raises the Target Overnight Rate for the First Time This Year." What is the Bank of Canada trying to do? a. Offset a possible rise in the inflation rate b. Increase exports C. Decrease unemployment O d. Stimulate the economy
A5
According to the Keynesian framework, ___________ may cause a recession, but not inflation a. a decrease in interest rates b.a decrease in a major trading partners export prices c. a major trading partner's economic slowdown d. an increase in domestic investment
When current output is less than potential output, the economy must have which of the following? ( Pick 1 Answer) A. Trade deficit B. Rise in inflationary expectations C. Increasing wages D. Cyclical unemployment
K In 2007 and 2008, Canada was affected by the global financial crisis that had begun with the U.S. housing collapse. By 2009, the Canadian economy had entered a recession, largely due to a reduction in investment and a The policy objective for the Bank of Canada and the government at this time was to OOOOO A. fall in housing starts; shift the AD curve to the left to close the recessionary output gap B. fall in net exports, shift the AS curve to close the inflationary output gap C. fall in consumption; shift the AD curve to the left to close the recessionary output gap D. fall in consumption; shift the AD curve to the right to close the inflationary output gap E. fall in net exports, shift the AD curve to the right to close the recessionary output gap
1. What are so-called heterodox adjustment programs? Are they a sound long-term approach? 2. Use the IS/LM/BP graph to illustrate the effects of a revaluation. Show the fiscal and monetary policy changes that would make it more likely that a revaluation will succeed in eliminating a payments surplus.
The following are examples of macroeconomic questions that remain debated among economists and policy-makers: 1. Does economic growth create inequality in income and wealth? 2. Do lower wages reduce unemployment? 3. Is there a trade-off between unemployment and inflation? 4. Is a large government debt a problem? 5. Should central banks target inflation in asset prices or only in consumer prices? Choose any two of the above questions and in each case briefly outline the economic reasoning behind different viewpoints.