Fiscal and Monetary Policy

School: New Jersey Institute of Technology           Price: $10.00 USD

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Assume that a country has a growing budget deficit, carries a very large debt, is in a period of high unemployment with interest rates almost at zero, and annual inflation and GDP growth of about 2%.

Suggest how fiscal and monetary policy can move those numbers to an acceptable level keeping inflation the same.
What is the first action you would take as the president? Why?

What is the first action you would take as the chairperson of the Fed? Why?
Make sure you include both the positive and negative effects of your actions, and include the trade-offs or opportunity costs.

Discuss the dangers of a high debt to GDP ratio and a growing budget deficit and how this affects your policy recommendations.
Your discussion should include the Phillips curve and the multiplier and at least three other of the following concepts:
Demand and supply of money
Interest rates
The Phillips curve
Government spending

Costs of inflation
The multiplier and the tax multiplier

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New Jersey Institute of Technology
Running head: FISCAL AND MONETARY POLICYFiscal and Monetary PolicyStudents NameInstitution1FISCAL AND MONETARY POLICY2Fiscal and Monetary PolicyPart 1The primary target is increase GDP development, curbing unemployment and curbthe large debt during steady inflation. The unemployed and inflation have mostly been the focusof macroeconomics (Nakamura & Steinsson, 2015). Alban W. Phillips a famous economistrecognized the Phillips curve that defined an antithetical relation between inflation andunemployment. The curve was paramount to the growth of the financial strategies and definesimportant connections between unemployment and inflation. So as to have unemployment andGDP to a level that can be considered as acceptable. The government and the fed would have tofocus on certain fields. The fed would need to focus on issues such as interest rates, Demand andsupply of money, wages and inflation costs. On the other hand the government will have to focuson government spending, taxation, tax multiplier and multiplier, the repayments of tax which isimportant in stimulating the growth of economy. (Greenlaw, 2013).The Federal Reserve will have to increase actu
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