Jun 24, 2024
The Distributional Effects of Stabilization Policy.
The Distributional Effects of Stabilization Policy
Watch The Distributional Effects of Stabilization Policy!
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The Distributional Effects of Stabilization Policy.
The Distributional Effects of Stabilization Policy
Watch The Distributional Effects of Stabilization Policy!
Monetary and Fiscal Policies in AD/AS
Read Mankiw's Principles of Economics, chapter 34. After reading you should be able to answer the following questions.
1. How does money demand/supply model explains downward sloping AD (interest rate channel)?
2. Try to think about what happens to AD when the interest rate is already zero and prices fall. We will come back to this.
3. What is the difference between Fed announcing money supply targets and Fed announcing interest rate targets?
4. How does monetary policy affects AD?
5. How does fiscal policy affects AD?
6. What are the arguments for and against stabilization policy.
7. What should monetary policy be to restore output to potential in all 12 situations?
8. What should fiscal policy be to restore output to potential in all 12 situations?