Please answer those two questions (a,b,). I won\'t rate unsatisfied answers or s
ID: 1185167 • Letter: P
Question
Please answer those two questions (a,b,). I won't rate unsatisfied answers or seems wrong answers. please write correct answers briefly. Question: There are some economists that believe the business cycle is driven by changes in fiscal policy(governemnt spending and taxes) a) Briefly explain what this implies in terms of our IS-LM and AD-AS model of the economy. In a recession, what would happen to the interest rate and output if this is true? b) If the business cycle is driven by changes in fiscal policy and you were the Chairman of the Federal Reserve, would you advocate monetary policy that held the money supply constant or monetary policy that held the interest rate constant? Explain your answer in the context of our IS-LM and AD-AS model.Explanation / Answer
A)ya this is true
We have seen equilibrium in the goods markets through the AE function and equations. This is just the beginning of the entire focus that we call the ISLM model. If you have a clear understanding of whatever we have just gone through in the previous 4 videos, congratulations! You are on your way to mastering macroecons and your dedication and optimism will bring you far! If you find yourself lacking behind.
B)
This lesson focuses on the January 30, 2013, press release by the Federal Reserve System's Federal Open Market Committee (FOMC) on the current Federal Reserve monetary policy actions and goals. Specifically, the lesson reports the target rate for the federal funds rate. This lesson is intended to guide students and teachers through an analysis of the actions the Federal Reserve is taking and can take in influencing prices, employment, and economic growth. Through this lesson, students will better understand the dynamics of the U.S. economy, current economic conditions, and monetary policies.