Major Debates over Macroeconomic Policy, economics homework help

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Select two subjects from the following list of topics and write a 1,050-word analysis:

  • Active monetary and fiscal policy
  • Increased government spending to fight recessions
  • Reducing federal government's discretionary powers
  • Zero-inflation target
  • Balanced government budget
  • Tax incentives for saving

Evaluate both the advocates' position and the critics' position. 

Determine which position you support and defend your position.

Cite a minimum of 3 peer-reviewed sources not including your textbook.

Format consistent with APA guidelines


Major Debates over Macroeconomic Policy Grading Guide ECO/372 Version 9 Individual Assignment: Major Debates over Macroeconomic Policy Purpose of Assignment Week 5 requires the student to address six unresolved issues in macroeconomics, each of which is central to current political debates. Students are required to use information and tools that they have accumulated in their study of the text and evaluate both sides of those issues, determine which side they can support for each issue, and defend their positions. Resources Required National Bureau of Economic Research http://www.nber.org/links/gov.html Grading Guide Met Content Partially Met Not Met Total Available Total Earned 13 #/X Partially Met Not Met Comments: Student selects two subjects from the list provided: a. active monetary and fiscal policy b. increased government spending to fight recessions c. reduce federal government’s discretionary powers d. zero-inflation target e. balanced government budget f. tax incentives for saving Student evaluates the advocates’ position and the critics’ position for the two subjects they choose. Student determines which position (advocates or critics) they support and provides a defense of their position for the two subjects they choose. The paper is 1,050 words in length. Met Writing Guidelines The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements. Intellectual property is recognized with in-text citations and a reference page. Copyright © 2016 by University of Phoenix. All rights reserved. Comments: 1 Major Debates over Macroeconomic Policy Grading Guide ECO/372 Version 9 Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper. Sentences are complete, clear, and concise. Rules of grammar and usage are followed including spelling and punctuation. Assignment Total # Total Available Total Earned 5 #/X 18 #/X Additional comments: Copyright © 2016 by University of Phoenix. All rights reserved. 2

Tutor Answer

TeacherWilliams
School: UIUC

Hi,kindly find the attached.It has been good working with you.Hope to interact more.Thanks again.

Running head: POLICY AND BUDGETING

1

Policy and Budgeting
Student’s name:
Course title & number:
Instructor:
Institution:
Date:

POLICY AND BUDGETING

2

Policy and Budgeting
Active monetary and fiscal policy has an influence in a country’s economic activity. Monetary
policy is majorly involved in control of interest rates and supply of money. Fiscal policy refers to
changes in government spending and taxes to overcome recessions or inflations. It can increase
an economy’s aggregate output. The government overcomes recessions by decreasing tax and
increasing its spending. The government is presumed to operate a deficit. An aggregate supply
demand curve describes how deficit spending would overcome a recession. Aggregate demand is
a total demand of final services and goods in a county’s economy at a certain price and time
(Musgrave, 2009).The figure below demonstrates an economy undergoing a recession.

An increase in aggregate demand to AD2 shifts GDP to Y2 and price to P2, with creation of an
inflationary gap Y2 − YP. In long run, as price and wages continue to increase, short-run supply
curve shifts to SRAS2 which is seen as to the left of a long-run aggregate supply curve and is

POLICY AND BUDGETING

3

upright aiming at the economy’s output. This shift to the left of the short run equilibrium shows
the economy is utilizing its resources. Output is below potential therefore the income being low
and unemployment showing that the country is making use of its resources. The output is below
potential thus income is low with unemployment and low production. Output of Y2 and price P2
are in short-run equilibrium; with an inflationary gap (http://2012books.lardbucket.org/).

The recession gap can be closed by a fiscal policy whereby an increase in government
spending causes the aggregate demand curve to shift to the right causing taxes to decrease with
ending of a recession though the price will become high (Musgrave, 2009).In the panel (a)
above, low wages contribute to a shift of the short-run supply curve to the right and the
economy’s equilibrium moves to P2 and potential output to YP. Cut taxes boost consumption, and
shifts aggregate demand AD1 to AD2 closing a recessionary gap as seen in panel (b) above. An
economy’s output obtains YP, with a higher price, P3. (http://2012books.lardbucket.org/).
Fiscal policy is significance in combating inflation although it can result to decreased
output and recession. The policy is unable to straighten out unemployment and inflation at one
time but can help in managing an economy’s stability through aggregate demand. One the other

POLICY AND BUDGETING

4

side, government plotting of this policy can take time. As good as helping in economy stability, a
decrease in government’s spending occurs during its borrowing of money to deal with an
occurred deficit (Musgrave, 2009).A balanced government budget is an important device as it
has an impact to an economy through changes in aggregate demand. During a recession,
spending of deficit promotes the aggregate demand to full employment and a growth of an
economy .In booming times, surpluses accumulate to offload previous deficits and aggregate
demand to avoid inflation. Expenditure levels are from the gains of public projects like road
works, railway projects or town city developments while revenues to finance expenditures are
acquired from tax rates making a surplus. On the other hand, it can be difficult predicting the
period of a budget and also in developing expenditure and taxing .The cyclical nature of the
budget is good. During recession, expenditures promote aggregate demand and tax rates become
low and a budget deficit is developed. During boom rates, revenue surpasses expenditures which
work on surplus. Through nature of the budget, it can affect the operations of curbing
hyperinflation which’s an overly increase in prices. Lack of order in expenditures and revenue
has an effect to an economy’s functioning. The balanced budget is good as it increases savings
and investments, decreases interest rates and trade deficits thus booming a country’s economic
growth. The economy growth occurs when people have the chance to grow and develop their
skills with increased utilization of resources; therefore people have a chance to improve their
standards of living out of the extra earnings available from the reduced rates and investments
with a vision of better investments growths ahead. A challenge occurs during a budget deficit
which is capable of affecting several spending programs with effect on county’s generations. A
burden can be created on people in various cores of their lives out of the budget deficit which
precipitates increase in taxes to reduce deficits which affects a country’s income. This creates

POLICY AND BUDGETING

increase in pricing of products and services consumed and become a challenge to the people
even to a citizen living under a very low wage. All in all, the government can increase its
spending and also reduce taxes so as to overcome this recession with good benefits of the
balanced budget (Rabin, 1992).

5

POLICY AND BUDGETING

6

References
http://2012books.lardbucket.org/books/macroeconomics-principles-v1.1/s10

Rabin, J. (E.d.). (1992).Handbook of public budgeting (voll 46).CRC Press.
Musgrave.F, Kacapyr.E. (2009).AP Macroeconomics/microeconomics.Barron’s Educational
Series.

Okay,I selected the first point  and the second last point which is on balanced government budget.I indicated my support at the very last paragraph of each of the two topics.Thank you for your patience.Kindly,see the attached

Running head: POLICY AND BUDGETING

1

Policy and Budgeting
Student’s name:
Course title & number:
Instructor:
Institution:
Date:

POLICY AND BUDGETING

2

Policy and Budgeting
Active monetary and fiscal policy has an influence in a country’s economic activity. Monetary
policy is majorly involved in control of interest rates and supply of money. Fiscal policy refers to
changes in government spending and taxes to overcome recessions or inflations. It can increase
an economy’s aggregate output. The government overcomes recessions by decreasing tax and
increasing its spending. The government is presumed to operate a deficit. An aggregate supply
demand curve describes how deficit spending would overcome a recession. Aggregate demand is
a total demand of final services and goods in a county’s economy at a certain price and time
(Musgrave, 2009).The figure below demonstrates an economy undergoing a recession.

An increase in aggregate demand to AD2 shifts GDP to Y2 and price to P2, with creation of an
inflationary gap Y2 − YP. In long run, as price and wages continue to increase, short-run supply
curve shifts to SRAS2 which is seen as to the left of a long-run aggregate supply curve and is

POLICY AND BUDGETING

3

upright aiming at the economy’s output. This shift to the left of the short run equilibrium shows
the economy is utilizing its resources. Output is below potential therefore the income being low
and unemployment showing that the country is making use of its resources. The output is below
potential thus income is low with unemployment and low production. Output of Y2 and price P2
are in short-run equilibrium; with an inflationary gap (http://2012books.lardbucket.org/).

The recession gap can be closed by a fiscal policy whereby an increase in government
spending causes the aggregate demand curve to shift to the right causing taxes to decrease with
ending of a recession though the price will become high (Musgrave, 2009).In the panel (a)
above, low wages contribute to a shift of the short-run supply curve to the right and the
economy’s equilibrium moves to P2 and potential output to YP. Cut taxes boost consumption, and
shifts aggregate demand AD1 to AD2 closing a recessionary gap as seen in panel (b) above. An
economy’s output obtains YP, with a higher price, P3. (http://2012books.lardbucket.org/).The
policy is unable to straighten out unemployment and inflation at one time but can help in
managing an economy’s stability through aggregate demand. One the other side, government
plotting of this policy can take time. As good as helping in economy stability, a decrease in
government’s spending occurs during its borrowing of money to deal with an occurred deficit

POLICY AND BUDGETING

4

(Musgrave, 2009). In my opinion, I give support to the active monetary and fiscal policy as it has
positive benefits towards economic growth. Fiscal policy is able to reduce taxes and overcome
inflations which are among the major challenges to a country’s economy. A country’s growth is
difficult when there is no finance or human effort of different kinds to drive the economy.
A balanced government budget is an important device as it has an impact to an economy
through changes in aggregate demand. During a recession, spending of deficit promotes the
aggregate demand to full employment and a growth of an economy .In booming times, surpluses
accumulate to offload previous deficits and aggregate demand to ...

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Anonymous
The best tutor out there!!!!

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