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Two expansionary monetary policy government which can be taken by government? (10 marks) Two expansionary fiscal policy steps which can be taken by government? (10 marks)
Expansionary monetary policiesOpen market operations; this refer to the practice of buying and selling on the open market in order to manage the amount of money available in banks.Interest rates;...
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1. Explain the difference between an expansionary and contractionary fiscal policy. When, why, and how are they used? Which one is more effective than the other?
Contractionary PolicyContractionary fiscal policy happens when the government and its public agencies lowers its expenditures, while also decreasing spending or increasing taxes at the same time. When a government reduces its...
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Describe the two key tools of monetary policy, and describe how they would be used by the Bank of Canada to implement a contractionary monetary policy
- The Bank of Canada may increase the Central Bank's discount rate in order to increase the cost of loans for business and the public. - The Bank of...
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Explain in details three (3) tools that a government can utilize while deploying expansionary/contractionary Monetary Policy.
1) Open Market OperationsThis is seen clear when central banks buy or sell securities. They are either bought from or sold to the country's private banks. When the central bank buys securities, it adds...
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Suppose the central bank conducts a contractionary monetary policy by reducing her growth rate of the money supply. How does a tightening of monetary policy influence nominal interest rates?
Tight monetary policy reduces the quantity of money and credit below what it otherwise would have been and raises nominal interest rates.
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Differentiate the fiscal and monetary policies.what are the effects of fiscal policy and monetary policy on short run equilibrium of the IS-LM model?
Fiscal policy influences the economy by controlling taxes and government spending. It impacts market of goods.On the other hand, monetary policy controls the money supply in the economy. Only the...
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An expansionary fiscal policy might include _ government spending and/or _ taxes, while a contractionary fiscal policy might include _ government spending and/or _ taxes
An expansionary fiscal policy might include increase in government spending and/or reduced taxes while a contractionary fiscal policy might include decrease in government spending and/or increased taxes.
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Q.1.3 An increase in the budget deficit is the result of: (2) (1) Expansionary monetary policy; (2) Contractionary monetary policy; (3) Expansionary fiscal policy; (4) Contractionary fiscal policy.
(1) Expansionary fiscal policy
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Explain when the FED would use a contractionary monetary policy and an expansionary monetary policy, and what the overall result would/could be.
Contractionary monetary policy is when the economic growth lowers down to prevent inflation. The pursue of FED is to control inflation of the economy rate of 2%.However the FED wants...
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Explain when the President and Congress would use a contractionary fiscal policy and an expansionary fiscal policy what the overall result could/would be.
If the President and Congress would use a contractionary fiscal policy and an expansionary fiscal policy, then it couldn't be effective, because these policies are opposite to each other and...
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