Fiscal and monetary policies in curtailing inflation
Explain the impact of changes in fiscal and monetary policies in curtailing inflation?
Expert
Changes in fiscal and monetary policies in curtailing inflation:
It is highly believed that the changes in monetary as well as fiscal policies can help in curtailing inflation. The suggested monetary policy in order to fix the inflationary issues is Contractionary Monetary Policy. To rectify the extremes of business-cycle extension and handle inflation, an economy could bring down the supply of money and perk up the interest rates. This is attained through trading treasury securities in the open marketplace, increasing the discount rate and incrementing reserve needs. Further, Keynesians asserts that a fall in the supply of money would increment interest rates, bring down spending, bring down Aggregate Demand and lastly, reduce prices and real output. This is eventually help to curtail inflation.
Moving ahead, the suggested fiscal policy to rectify the inflationary issues is contractionary fiscal policy. Contractionary fiscal policy takes in any amalgamation of a decline in government spending, a fall in transfer payments or an increment in taxes. The fiscal policy is proposed to hold back the economy by bringing down aggregate spending and aggregate demand and reduce the level of inflation. According to Keynes, an alteration in government expenditure is the more efficient fiscal policy component, since any modification in government expenditure has a straight impact on AD (aggregate demand).
Use economic theory to explain the inflation movements and factors influencing it. Use relevant models to explain the impact of changes in fiscal and monetary policies in curtailing inflation.
When you pay a straight A student in advance to write up your term paper and that person expends the money on a party and then, hung-over, can’t do a good job and hence you wind up with an F for submitting sloppily written gibberish, you encompass just suffered
Question: Some commentators have argued that the failure of the "Supercommittee" is good thing for the economy? Do you argree? Answer: Q : Net revenue when price increases Net Net revenue for Macho Man fake mustaches increases after the price raised from $5 to $7, pointing that demand faced by Macho Man was: (i) Relatively elastic. (ii) Relatively inelastic. (iii) Unitarily elastic. (iv) Perfectly inelastic. (v) Perfectly e
Net revenue for Macho Man fake mustaches increases after the price raised from $5 to $7, pointing that demand faced by Macho Man was: (i) Relatively elastic. (ii) Relatively inelastic. (iii) Unitarily elastic. (iv) Perfectly inelastic. (v) Perfectly e
What are the conditions through which the supply curve will shift?
Between 1961 and 2007, the rising share of the Canadian population in paid employment contributed to rising GDP per person. But suppose that the share of the Canadian population in paid employment had remained constant between 1961 and 2007. What would Canadian GDP pe
Which of the given is a bank? a) Post office saving banks (b) LIC (c) UTI (d) IDBI.
Why the value of MPC is not greater than 1? Answer: This is because change in consumption can never be more than change in income.
1. Examples of command economies are: A. The United States and Japan. B. Sweden and Norway. C. Mexico and Brazil. D. Cuba and North Korea.
Why can be value of MPC be not more than one? Answer: The value of MPC will not be more than one since increment in consumption (ΔC) can’t be more than
18,76,764
1934891 Asked
3,689
Active Tutors
1413698
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!