Assignment:
In an effort to move the economy out of recession, the federal government would engage in expansionary economic policies. Respond to the following points in your paper on the action the government would take to address expansionary fiscal and monetary policies:
Expansionary fiscal policy:
Explain action federal government would take while engaging in expansionary fiscal policy in term of the following:
· The necessary change in taxes and government spending
· The effect on aggregate GDP and employment.
Expansionary monetary policy:
The three tools the Federal Reserve Bank (the FED) uses when conducting monetary policy are the required reserve ratio, the discount rate, and open market operations. Explain the action of the fed in regard to the three tools.
1. When the required reserve ratio is increased or decreased
2. When the discount rate is increased or decreased
Buying and selling government securities when conducting expansionary monetary policy. Explain how these action would affect the money supply, interest rate, spending, aggregate demand, GDP, and employment
Write 5 to 6 pages paper ( not including title and reference pages), using at least 5 scholarly sources, including textbook. The paper must be in APA style.