The Covid-19 pandemic has forced many countries to partially shutdown their economies to prevent the spread of the virus. In response, many governments including Jamaica have embarked on expansionary fiscal policy. Government Fiscal and Monetary Policy can coordinate to achieve specific economic goals. (a) Use a carefully labeled diagram consisting of an IS curve and the LM curve to illustrate the effect of an expansionary fiscal policy. Assume the Bank of Jamaica want to hold the money supply constant. Please explain your answer. (b) Use a carefully labeled diagram consisting of an IS curve and the LM curve to illustrate the effect of an expansionary fiscal policy. Assume instead, the Bank of Jamaica want to hold interest rate constant. Please explain your answer. (c) Use a carefully labeled diagram consisting of an IS curve and the LM curve to illustrate the effect of an expansionary fiscal policy. Assume the Government wants to hold output constant. Please explain your answer.

Macroeconomics. True/False Questions. Please answer all questions and give brief explanation. The short-run nominal interest rate decreases and the long-run nominal interest rate increases when the central bank increases money supply. The tax multiplier is larger than the government spending multiplier. According to the Pigou effect, a decrease in price leads to an increase in output. Under a small open economy model with floating exchange rates, an increase in money supply leads to an increase in investment and output. In theory, an increase in country risk premium leads to a decrease in investment and output. Under the closed economy model, if money demand does not depend on the interest rate, the LM curve is vertical. The (negative) tradeoff between inflation and unemployment holds only in the short run. According to the life cycle model, population aging (the fraction of the population that is elderly increases) leads to a decrease in national saving. According to…

Use the following versions of the IS-LM model to answer all sections: Question: c. determine the equilibrium value of Y, if M = 2,200, P = 1, and Yp = 4000 d. Based on the results of question point c, does the government budget experience a surplus, deficit, or balance?

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.

Some liken quantitative easing to that of directing a firehose of money to emerging economies that cannot manage the cash, while others worry that the flood of cash has encourages reckless financial behavior. What specific types of "reckless" financial behavior comes from quantitative easing and by whom?   Which measure will reduce employment best: government tax reduction, or increased government spending? Can you compare the multiplier effect of a tax reduction versus the multiplier effect of an increase in government spending? There are TWO formulas. Which of the two will have a bigger impact in the economy and why based on the two formulas? Using the formulas, figure this out: If $30 billion in new investment is added to the economy and MPC is 0.9, how much would the national income (GDP) increase by?

Give only typing answer with explanation and conclusion

3. Answer the following numerical questions about the IS-FX model.   a. The consumption function is C = 1.5 + 0.5(Y – T). What is the marginal propensity to consume? What is the marginal propensity to save?   b. The trade balance is TB = 5(1 – 1/E) – 0.2(Y – 8). What is the marginal propensity to consume foreign goods? What is the marginal propensity to consume home goods?   c. The investment function is I = 3 – 10i. What is investment when the interest rate i is equal to 5%?   d. Assume government spending is G. Add up the four components of demand and write down the expression for D.   e. Assume forex market equilibrium is given by I = (1/E – 1) + 0.15, where the two foreign return terms on the right are expected depreciation and the foreign interest rate. What is the foreign interest rate? What is the expected future exchange rate?

Read the following extract about an aspect of the UK in 2013 and decide whether it is describing a short-run, medium-run or long-run policy challenge. 'The International Monetary Fund is advising the chancellor to defer the UK cuts programme and instead stimulate the faltering economy: hit the austerity pause button; invest more in social housing, schools and road repairs. Growth is more important right now than deficit reduction. Couched in suitably polite language, that was the uncomfortable message from the International Monetary Fund to George Osborne. State A, B or C A: Short-run B: Medium-run C: Long-run

Q2-14 From an initial equilibrium position for the economy (at the three-way intersection of the IS, LM, and BP curves) and if the LM curve is steeper than the BP curve, expansionary fiscal policy initially leads to a balance of payments (BOP) ______, and expansionary monetary policy _______. Select one: a. deficit / also initially leads to a BOP deficit b. deficit / initially leads to a BOP surplus c. surplus / initially leads to a BOP deficit d. surplus / also initially leads to a BOP surplus

After the Federal Reserve conducts an open-market purchase of bonds to increase the money supply, it takes time for banks to make new loans and even more time for the full multiplier effect to run its course. This illustrates the fact that the(impact lag/recongition lag/administrative lag)? can make it difficult for economic policymakers to achieve their goals in an effective and timely manner.