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Assume congress wants to stimulate a sluggish economy in which the basic economic indicators are all trending downward. How could it use its taxing power to do this?

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Garima Menon
Garima MenonLv7
31 Mar 2021
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Related questions

Macropoland is currently experiencing a recession - consumption and investments are very sluggish, and unemployment is quite high at 9%. Currently, inflation is very low at 0.4% (the historical average rate of inflation is about 2%). The Macropolish President has just hired you as her economic advisor. Your job is to prescribe policies that would enable the economy to recover from the recession. Explain how you could use the standard tools of expansionary monetary policy and expansionary fiscal policy to stimulate this economy towards economic growth.

Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical manner as appropriate for the genre of writing. Use well-structured sentences, audience-appropriate language, and correct conventions of standard American English.

Which economic indicators are used to measure the global economy? Check all that apply. 
a) Purchasing power parity 
b) trade volume 
c) spending power parity 
d) Labor market data 
e) Gross Domestic Product
f) trade deficit and surpluses

As you have learned in Unit 8 (this week), monetary and fiscal policy play important roles in economic stimulation and or stabilization. In this regard:

 

a. When is it appropriate to use monetary and fiscal policy to stimulate or stabilize the economy? 

b. When is it inappropriate to use monetary and fiscal policy to stimulate or stabilize the economy?

c. What specific fiscal policy tools would you use to stimulate aggregate demand and how?

d. What specific monetary policy tools would you use to stimulate aggregate demand and how?

e. What is your conclusion, should policymakers use the monetary and or fiscal policy to stimulate aggregate demand? Explain briefly.

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