Read the following excerpts. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the AD/AS graph as a result of the policy action described in each. Identify what will happen as a result of the policy to the price level, employment, and real GDP. Excerpt from FOMC Statement Released December 16, 2008 “The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to ¼ percent. Since the Committee’s last meeting labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.” Identify whether the policy action is fiscal or monetary. Identify whether the policy action is expansionary or contractionary. Draw and label the change that would occur on the AD/AS graph as a result of the policy action described in each.
Read the following excerpts. Identify whether the policy action is fiscal or monetary and expansionary or contractionary. Draw and label the change that would occur on the AD/AS graph as a result of the policy action described in each. Identify what will happen as a result of the policy to the price level, employment, and real
Excerpt from FOMC Statement Released December 16, 2008
“The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to ¼ percent.
Since the Committee’s last meeting labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.”
Identify whether the policy action is fiscal or monetary.
Identify whether the policy action is expansionary or contractionary.
Draw and label the change that would occur on the AD/AS graph as a result of the policy action described in each.
Identify what will happen as a result of the policy to the price level, employment, and real GDP
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