Principles of Economics, 7th Edition (MindTap Course List)
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
Question
Chapter 36, Problem 1PA

Subpart (a):

To determine

Natural restorative powers of the economy.

Subpart (b):

To determine

Natural restorative powers of the economy.

Subpart (c):

To determine

Natural restorative powers of the economy.

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Students have asked these similar questions
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.
Suppose that consumers become pessimistic about the future health of the economy. What will happen to aggregate demand and to output? What might the president and Congress have to do to keep output stable?  What might the Federal Reserve do?
What type of policy are this using (expansionary or contractionary)? How will it impact unemployment, GDP, inflation? How will it impact aggregate supply and demand? Will these changes harm our economy? Are they worth it?
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