Expert answer:Fiscal policy and Government spending, economics h
Answer & Explanation:///Objective:Describe the concepts and measurement of Gross Domestic Product (GDP), unemployment, and inflation Explain what is meant by “business cycles” and “economic growth and describe the factors that contribute to each. Demonstrate understanding of the relevance and impact of macroeconomics and how it impacts politics, the workplace, and people.///Two important policy goals of the government and the Fed are to keep
unemployment and inflation low, while at the same time making sure that
GDP is increasing at an average of 3% per year. It is important to have
the right mix of policies and that all the variables be timed perfectly.
Part 1: Assume that the country is in a period of
high unemployment, interest rates are at almost zero, inflation is about
2% per year, and GDP growth is less than 2% per year.
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? As the chairman of the Fed? Why?
What would be your subsequent steps?
Make sure you include both the positive and negative effects of your actions, and include the trade-offs or opportunity costs.
Include the following concepts in your discussion:
Demand and supply of money
Interest rates
The Phillips curve
Taxation
Government spending
Wages
Costs of inflation
The multiplier and the tax multiplier
The idea of tax rebates to stimulate the economy
Part 2: Assume that the country is in a budget
deficit and carrying a very large debt. Discuss the dangers of a high
debt to GDP ratio and a growing budget deficit. Would this affect any
policy changes you discussed in Part 1?800-1000 words APA
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