ANT 1101 Study Guide - Monetary Policy, Aggregate Demand, Deflation

• School: University of Ottawa
• Department: Anthropology
• Course: ANT 1101
• Professor: Carl Denis

Document Summary

Policy: should monetary and fiscal policy makers try and stabilize the economy, economies tend to fluctuate when left on their own. No: the advantage to allowing elected officials to influence monetary policy is the element of accountability. Government provides strict guidelines to bank of canada on how to do their job, and without these guidelines the sole authority lies on the bank, resulting in undisciplined direction with no one to hold accountable for mistakes. Inflation confers no benefit but imposes several costs ( shoeleather costs, menu costs, misallocation of resources, increased variability of relative prices, unintended changes in tax liabilities, confusion and redistribution of wealth) 0 inflation is a more natural focal point (stability with no inflation costs) No: problems of government debt are often exaggerated ( not large to the average person;s lifetime income, effects of a deficit are one piece to a larger picture on how government raises and spends money.