The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

Question

(Policy Lags) What lag in discretionary policy is described in each of the following statements? Why do long lags make discretionary policy less effective (explain a-d)? a. The time from when the government determines that the economy is in recession until a tax cut is approved to reduce unemployment b. The time from when the money supply is increased until the resulting effect on the economy is felt c. The time from the start of a recession until the government identifies the existence and severity of the recession d. The time from when the Fed decides to reduce the money supply until the money supply actually declines

Answer 1

Question

Chapter 16, Problem 3.4P

Sub-part

A

To determine

The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

B

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

C

To determine

The lags in the discretionary policy from the time the recession has started until the time until the time government has identified the severity and existence of recession and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

D

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

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(Policy Lags) What lag in discretionary policy is described in each of the following statements? Why do long lags make discretionary policy less effective (explain a-d)? a. The time from when the government determines that the economy is in recession until a tax cut is approved to reduce unemployment b. The time from when the money supply is increased until the resulting effect on the economy is felt c. The time from the start of a recession until the government identifies the existence and severity of the recession d. The time from when the Fed decides to reduce the money supply until the money supply actually declines

Congress passed the CARES Act to provide an economic safety net during the Covid-19 pandemic shutdown. The CARES Act included stimulus checks that were sent to some households. Households with individuals making up to $75,000 received a $1,200 check and households with married couples making up to $150,000 received a $2,400 check. Think about how the savings rate varies with household income and the utility of savings versus spending when answering the questions below. 1. Explain why Congress only sent stimulus checks to households up to a certain income level. 2. Does this program make sense given the fact that there is a severe economic downturn? Why or Why not?

Which of the following statements are FALSE? (a) When the government prints money to buy goods and services the resulting inflation is a form of tax, since people will not have to pay more for their goods and services than before. (b) An effective fiscal policy macroeconomic stimulus should aim to replace private spending with public (government) spending. (c) To be effective a fiscal policy macroeconomic stimulus should have temporary increases in spending and permanent tax cuts. (d) The paradox of thrift is that the increase in saving during a recession because people postpone major purposes prolongs the recession and thus is not good for the economy, while normally saving grows the economy.

Answer 2

Question

Chapter 16, Problem 3.4P

Sub-part

A

To determine

The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

B

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

C

To determine

The lags in the discretionary policy from the time the recession has started until the time until the time government has identified the severity and existence of recession and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

D

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

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Answer 3

Question

Chapter 16, Problem 3.4P

Sub-part

A

To determine

The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

B

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

C

To determine

The lags in the discretionary policy from the time the recession has started until the time until the time government has identified the severity and existence of recession and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

D

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

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Answer 4

Question

Chapter 16, Problem 3.4P

Sub-part

A

To determine

The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

B

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

C

To determine

The lags in the discretionary policy from the time the recession has started until the time until the time government has identified the severity and existence of recession and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

D

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

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Answer 5

Chapter 16, Problem 3.4P

Sub-part

A

To determine

The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

B

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

C

To determine

The lags in the discretionary policy from the time the recession has started until the time until the time government has identified the severity and existence of recession and the reasons for which the long lags make discretionary policy ineffective.

Sub-Part

D

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Answer 6

Chapter 16, Problem 3.4P

Sub-part

A

To determine

The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

Answer 7

Chapter 16, Problem 3.4P

Sub-part

A

To determine

The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

Answer 8

Sub-Part

B

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Answer 9

Sub-Part

B

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Answer 10

Sub-Part

C

To determine

The lags in the discretionary policy from the time the recession has started until the time until the time government has identified the severity and existence of recession and the reasons for which the long lags make discretionary policy ineffective.

Answer 11

Sub-Part

C

To determine

The lags in the discretionary policy from the time the recession has started until the time until the time government has identified the severity and existence of recession and the reasons for which the long lags make discretionary policy ineffective.

Answer 12

Sub-Part

D

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Answer 13

Sub-Part

D

To determine

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Answer 14

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Ch. 16 - Prob. 1.1P Ch. 16 - Prob. 1.2P Ch. 16 - Prob. 2.3P Ch. 16 - Prob. 3.4P Ch. 16 - Prob. 4.5P

The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

Solution Summary: The author explains the lags in the discretionary policy from the time the government determines that recession is there until a tax cut is available to reduce unemployment.

The lags in the discretionary policy from the time when the government determines that recession is there in economy until a tax cut is there in order to reduce unemployment and the reasons for which the long lags make discretionary policy ineffective.

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

The lags in the discretionary policy from the time the recession has started until the time until the time government has identified the severity and existence of recession and the reasons for which the long lags make discretionary policy ineffective.

The lags in the discretionary policy from the time there is an increase in the money supply to until its effects on the economy is realized and the reasons for which the long lags make discretionary policy ineffective.

Chapter 16 Solutions