MGEA06H3 Lecture Notes - Fiscal Policy, Reserve Requirement, Shortage

69 views6 pages
fatimamohammed1230 and 36990 others unlocked
MGEA06H3 Full Course Notes
2
MGEA06H3 Full Course Notes
Verified Note
2 documents

Document Summary

Stabilization policy & the introduction of open economy. N discuss the effectiveness of monetary policy in affecting output. N compare how fiscal & monetary policies affect ad. N use of fiscal & monetary policies to smooth out business cycles. N discuss issues related to stabilization policy such as the crowding out effect and national debt. N monetary policy could be used to affect output: Introduce open economy in our model discuss the country"s balance of payments: to increase output the central bank should run expansionary monetary policy, to decrease output the central bank should run contractionary monetary policy. N answer: yes if the links hold up. For example, when ms increases, interest rate decreases: this decrease in interest rate would stimulate (physical) investment if firms and households were willing to invest. Investment increases ae increases ad increases y increases.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

Related Questions