Major Debates Over Macroeconomic Policy

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xxss2000

Economics

Description


Purpose of Assignment

This week 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.

Assignment Steps

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 three peer-reviewed sources not including your textbook.

Format consistent with APA guidelines.

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Explanation & Answer

Attached.

Running Head: MACROECONOMICS POLICY

Macroeconomic Policy
Name
Course
Tutor
Date

1

MACROECONOMY POLLICY

2

Macroeconomic Policy
A macroeconomic policy is a policy type that usually has its implementation through a
set of tools, which is the monetary policy and the fiscal policy (Dosi et al. 2015). The two sets of
systems are both used to ensure the stabilization of the economy, and what this means is that the
economy is boosted to a consistent GDP with full employment benefits.
Active monetary and fiscal policy
The active and fiscal policies are the two primary tools that are used by the state to
achieve the macroeconomic objectives (Peacock & Shaw, 2014). The primary purpose of the
budgetary policy is mainly to add to the aggregate output of the economy, while the monetary
policy bases its aim on controlling the interest and inflation rates. One of the primary models that
are used to depict the overall effects of policy interactions on the aggregate output and the
interest rates is the IS/LM model.
Advocate’s Position
The advocate's position is based on five debatable questions, and this mainly looks at:
1. If the monetary and fiscal policymakers should try and stabilize the economy?
2. Whether the monetary policy is made by rule rather than being based on discretion?
3. If the central bank should aim for zero inflation?
4. If the government should be able to balance its budget?
5. If the tax laws should be reformed to encourage saving?
Starting with the first ...


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