Fiscal Policy: You are an economic adviser to the President. Again, reference th
ID: 1116212 • Letter: F
Question
Fiscal Policy: You are an economic adviser to the President. Again, reference the last two digits of your phone number but this time have them represent the growth rate and the inflation rate respectively (note the opposite order). Once again, provide an unemployment rate that seems plausible and assess the economic situation in the country. What fiscal policy would you recommend to the President and why?
Fiscal Policy: You are an economic adviser to the President. Again, reference the last two digits of your phone number but this time have them represent the growth rate and the inflation rate respectively (note the opposite order). Once again, provide an unemployment rate that seems plausible and assess the economic situation in the country. What fiscal policy would you recommend to the President and why?
Explanation / Answer
last two digits: , 2, 8.
Growth rate 2%
Inflation 8.%
Unemployment = 7%
The economy is below the natural level of output and is under recessionary pressure. In order to revive the eonomy the government should increase its expenditure so as to incraese demand in the economy. The increase in demand will shift teh AD curve to teh right in the AD-AS setup and will increase teh output in the economy. The inflation in the economy will also be helpful in incentivising the suppliers as we move along the Short run supply curve to reach the new higher level of output.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.