ECO202 1. Explicitly define both fiscal and monetary policy. 2. Compare and contrast the way Keynes and Friedman approach the economy. What are their key differences and similarities? 3. The following are five current or historical government actions dealing with macro-economic policy. For each scenario determine if it represents fiscal policy or monetary policy‚ and explain your answer. a. President Obama has proposed a budget for the next year and the House of Representatives has
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Evaluating Fiscal Policy Alternatives simulation Principles of Macroeconomics Evaluating Fiscal Policy Alternatives simulation Introduction Fiscal policy is whenever the government changes government spending or taxation as a means of influencing the market economy. This change takes place to stimulate or to restrain inflation. Fiscal policy is the manipulation of trends in the economy by the government. The content of this paper will discuss the effects of the changes in fiscal policy based
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is the Fiscal policy? Fiscal policy is the use of government spending and taxation to influence the economy. When the government decides on the goods and services it purchases‚ the transfer payments it distributes‚ or the taxes it collects‚ it is engaging in fiscal policy. The primary economic impact of any change in the government budget is experienced by particular groups—a tax cut for families with children‚ for example‚ raises their disposable income (Weil‚ n.d.). Discussions of fiscal policy
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Expansionary Economic Policy Cory Pelisek ECO203: Principles of Macroeconomics Instructor: Thomas Westover Monday‚ March 9‚ 2015 In economic terms‚ a recession is classified as a slow growth or lack of growth in economic activity; in order for the economy to get out of the recession‚ the government must implement expansionary economic policies. The role of government in the American economy extends far beyond its activities as a regulator of specific industries. The government also manages the
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Unemployed individuals The American budget deficit is a deterrent for employment and economic growth. According to the Bureau of Labor Statistics (2014)‚ the unemployment rate is at 5.8% as of November 2014.Nonfarm payroll employment increased by 321‚000 in November. Moreover‚ the unemployment rate was unmoved at 5.8 %. Gains of new jobs were widespread‚ which was led by growth in business services‚ retail‚ health care etc. The number of unemployed persons had little change at 9.1 million dollars
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by the Federal Reserve when to change interest rates in the economic market (Amadeo‚ 2010). Fiscal Policy The government bodies that determine the national fiscal policies are the president and Congress. Each government body has a different approach to the economy and the role the national fiscal policies influence the direction of the economy. There is a direct effect from fiscal policies on the economy’s production and employment. For example‚ if the government wants to repair highways
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FISCAL POLICY AS AN ECONOMIC STABILIZATION MEASURE Fiscal Policy refers to the various decisions undertaken by the government regarding public expenditures and revenue. There are a large number of sub-policies that are encompassed by the fiscal system. But all the policies can be broadly categorized as being either ‘Public Expenditure’ or ‘Public Revenue’. It can be said that the fiscal policy is a direct government intervention in the economic processes of an economy. The fiscal policy
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South Africa’s Fiscal & Monetary Policy o Table Of Contents o Introduction o Body o Conclusion o References Introduction In this presentation I will discuss whether or not the South African fiscal and monetary policy are complimentary or not. We need to first define both the fiscal and monetary policy in their economic sense. Firstly‚ the formal definition of the monetary policy are all the deliberate steps of the monetary authority to affect monetary aggregates such as the money supply
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uses Fiscal and Monetary policy. Fiscal policy is used to determine the appropriate level of spending and taxes‚ whereas monetary policy manages the supply of money in the economy. When the economy enters a recession‚ governments stimulate it with deficit spending‚ whereas during an economic growth governments control it with higher taxes to achieve a surplus. These policies are based on the concepts of British economist John Maynard Keynes (1883-1946). Consumers mainly influence fiscal policy by their
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Fiscal Policy for reducing the unemployment rate The employment rate is quite an important variable to a country because it represents the country’s economic situation is good or bad.In order to reduce the unemployment rate‚both demand side policies and supply side policies can be used.On the demand side‚there are fiscal policy and monetary policy.While on the supply side‚there are many policies like improving labor market flexibility‚employment subsidies‚better education and training‚lower employment
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