Fiscal & Monetary Policy Given the Current Macroeconomic Situation in the United States DeVry University Economics Instructor: Professor Bergan June 16‚ 2013 The macroeconomic situation in the United States can be determined by looking at what part of the business cycle the economy currently falls within. According to McConnell‚ Brue & Flynn (2012) “Business cycles are alternating rises and declines in the level of economic activity‚ sometime over several years” (p. 527). A typical business cycle
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The Fiscal and Monetary Policy and Economic Fluctuations Sarah Ferreira ECO100 Dr. Phyllis Isley December 08‚ 2014 The Fiscal and Monetary Policy and Economic Fluctuations Discuss the current economic situation in the U.S. as compared to five (5) years ago. Include interest rates‚ inflation and the unemployment rate in your explanation. Five (5) years back in 2008 interest rates were curbed several times in an endeavor to economic stimulation. The rates of interest commenced on January 2008 at 3
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2. GDP Growth rate The growth rate is declining and might be negative in the upcoming years. which is bad indicator of the Russian economy thus it shows is suffering and might get into recession forcing the Russian government to cut on fiscal policies to avoid it. 3. Inflation inflation is continuously rising at hit a high of 8.29% which reduce consumer spending and negative. Thus affect the negatively on the overall economy. Foreign Trade Balance Russia trade surplus decreased to $12.95
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financial system. The Federal Reserve’s monetary policy included taking into account various steps. The bank interchangeably contracted and expanded its balance
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which a competitive capitalist economy can produce the necessary motivation for it to grow. Monetary policy needs to be focused on creating price stability with a current official target of 2% inflation‚ while exchange rate policy can be aimed at keeping the value of the currency stable in international foreign exchange markets. Fiscal policy can be used to support the monetary and exchange rate policies and the government should focus on their golden rule and sustainable investment rule to ensure
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businesses‚ government‚ and the rest of the world. -A movement down the AD curve leads to a lower aggregate price level and higher aggregate output. * Y = C + I +G + NX (before adding G and NX back into the Keynesian Cross to discuss fiscal policy and trade.) Now- price level. The Aggregate Demand Curve: Shows the relationship between the aggregate price level and the quantity of aggregate output demanded. *Not the same as micro. *if all prices change Wealth Effect of a change in the aggregate
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Depression were major factors leading to changes in the system. The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximum employment‚ stable prices‚ and moderate long-term interest rates. Its duties have expanded over the years‚ and today‚ according to official Federal Reserve documentation‚ include conducting the nation’s monetary policy‚ supervising and regulating banking institutions‚ maintaining the stability of the financial system and providing financial
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because of tight credit‚ decreases in government budgets‚ suppression of demand by consumers and foreign markets‚ and the inability by the fed lower interest rates. Even with the low level of interest rates the Fed is currently practicing a tight monetary policy. The current 9.7 percent unemployment rate is because of cyclical forces rather than structural ones. Obama is currently trying to administer a program of active intervention to stimulate demand. This involves increasing aid to states‚ extending
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blamed factors such as the soaring prices of oil and other commodities in the world market while some economists argued that the cause of high inflation was losing macroeconomic policies‚ including inappropriate monetary and exchange rate policy of the monetary authority. Some other people asserted that expansionary fiscal policy in the form of huge investment in large state-owned firms in 2009-2010 lead to a double digit in inflation rate. Demand-driven as well as cost-push inflation Global commodity
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Government Economic Policy A policy refers to any rule or principle used in guiding decision making and achieving rational results. The intended goals to be achieved by a policy widely vary with the organization and the context to which it was made. Policies are basically made to prevent negative effects noticed in an organization or promote positive benefits. Government economic policy refers to the actions that a government takes to influence its economy. The economic policy covers the methods
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