Monetary and fiscal policy are government attempts to smooth the business cycle, especially the use of expansionary policies to return to GDP growth from a recession. The goals are relatively short-term, not more than 5 years. Long-term growth, however, is arguably more important.
A) During a recession, politicians and economists often speak of returning the nation to full employment. Does this mean zero unemployment? If not, why isnât zero unemployment desirable?
B) Relatively free trade exists between the US and Mexico as a result of the North American Free Trade Agreement (NAFTA). Should the Law of One Price prevail in major consumer goods sold in the 2 countries? Explain.
Monetary and fiscal policy are government attempts to smooth the business cycle, especially the use of expansionary policies to return to GDP growth from a recession. The goals are relatively short-term, not more than 5 years. Long-term growth, however, is arguably more important.
A) During a recession, politicians and economists often speak of returning the nation to full employment. Does this mean zero unemployment? If not, why isnât zero unemployment desirable?
B) Relatively free trade exists between the US and Mexico as a result of the North American Free Trade Agreement (NAFTA). Should the Law of One Price prevail in major consumer goods sold in the 2 countries? Explain.
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