Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 14, Problem 7RQ
To determine
Justification for the fiscal stimulus during the financial crisis.
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During difficult economic times, why are uniform across-the-board budget cuts poor fiscal policy?
Why does a balanced budget increase in spending and taxes increase aggregate demand?
What is the reason why fiscal policy should be in tune with monetary policy when the economy is in the recession phase?
Chapter 14 Solutions
Macroeconomics (Fourth Edition)
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- What is the importance of fiscal policy during times of economic recession? What is the reason why fiscal policy should be in tune with monetary policy when the economy is in the recession phase? How important is the Central Bank in the financial market?arrow_forwardWhy did some governments feel that they had to introduce “austerity” fiscal policies soon after the 2008/9 Global Financial Crisis? please help asaparrow_forwardWhat type of fiscal policy would be appropriate to use during a recessionary period? How might this affect aggregate demand, unemployment, and inflation?arrow_forward
- How and why would the line-item veto influence budget reforms and reduce deficits?arrow_forwardIf stability of the economy is the primary objective of Fiscal Policy, then an Annually Balanced Budget (Government Expenditures = Tax Revenues) is the best policy approach. True or False?arrow_forwardWhat are the implications of the current fiscal stimulus and low interest on the future of our country from an economic perspective?arrow_forward
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