Net fx position -$75 billion. Inflation, budget deficit and unemployment are very high and growth rate is low, though credit expansion in the recent years is huge. President still claims that they will decrease the interest rate. Would monetary and fiscal policies be effective under these circumstances?

Net fx position -$75 billion. Inflation, budget deficit and unemployment are very high and growth rate is low, though credit expansion in the recent years is huge. President still claims that they will decrease the interest rate. Would monetary and fiscal policies be effective under these circumstances?

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter12: Fiscal Policy, Incentives, And Secondary Effects

Section: Chapter Questions

Problem 9CQ

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