Question and answer
using expansionary policies to combat a recession would?
Both expansionary monetary policy and expansionary fiscal policy are being used to counter the recession. Expansionary monetary policy is basically just lending more money to people, [ people borrow that money and spend it creating demand in the process. The United States has been using expansionary monetary policy for about 20 years straight now which has directly lead to massive increases in
the levels of debt in the economy. Debt levels are so high now that no one can actually borrow any more so monetary policy has stopped working. Monetary policy is at the most expansionary setting possible right now and it is having effectively no expansionary impact on the economy as a consequence of excessive debt levels. Fiscal policy thus is the only option left available to actually rectify the situation, basically all you are doing is spending money through the government thus creating demand in the economy. Measures being taken include tax cuts (which I personally disagree with under the circumstances as a greater demand impact could be achieved by spending elsewhere like unemployment benefits without the cost of reducing revenue, increased unemployment benefits actually increases govt revenue), other measures being taken include infrastructure spending and extending the length of unemployment benefits. This is basically a Keynesian approach. Keynesian economics revolves around the concept of 'aggregate demand' the government can increase the amount of aggregate demand through government spending. A Keynesian approach is fundamentally the right way to go under the circumstances that exist as this crisis is basically a crisis of demand. ]
Expert answered|badeeani|Points 10|
Question
Asked 9/6/2013 6:14:13 PM
0 Answers/Comments
Get an answer
New answers
Rating

There are no new answers.

Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
25,363,954 questions answered
Popular Conversations
A geocentric system is ...
Weegy: A geocentric system is Earth-centered. User: In the past, astronomical observations were an important part of ...
5/29/2016 1:57:09 PM| 3 Answers
coercive
Weegy: The Coercive Acts were meant to reverse the trend of colonial resistance but actually provoked higher levels of ...
5/29/2016 3:19:03 AM| 2 Answers
Which of the following statements does NOT describe how teens can ...
Weegy: In order to gain the maximum benefits from an exercise program, you should include both cardiovascular training ...
5/29/2016 9:17:54 AM| 2 Answers
The wicked witch and the big bad wolf are examples of A. ...
Weegy: A. Dynamic Characters, characters you know and love from fictional stories. User: If an author wanted to ...
5/29/2016 11:33:48 AM| 2 Answers
In order to minimize the difficulty associated with meeting monthly ...
Weegy: In order to minimize the difficulty associated with meeting monthly loan payments, the debt service ratio should ...
5/29/2016 9:21:26 PM| 2 Answers
Why are closing costs a one time fee?
Weegy:
5/30/2016 12:02:23 AM| 2 Answers
What is Marasmus? User: What is kwashiorkor?
Weegy: Kwashiorkor is a childhood disease that is caused by protein deprivation. User: What is ketosis? User: ...
5/30/2016 9:38:40 AM| 2 Answers
Weegy Stuff
S
Points 734 [Total 734] Ratings 10 Comments 614 Invitations 2 Offline
S
Points 715 [Total 715] Ratings 13 Comments 585 Invitations 0 Offline
S
Points 646 [Total 646] Ratings 0 Comments 646 Invitations 0 Offline
S
1
L
L
P
R
P
L
P
P
R
Points 299 [Total 12551] Ratings 2 Comments 279 Invitations 0 Offline
S
L
P
P
P
Points 166 [Total 3543] Ratings 0 Comments 166 Invitations 0 Offline
S
Points 38 [Total 107] Ratings 0 Comments 38 Invitations 0 Offline
S
L
Points 23 [Total 4115] Ratings 0 Comments 23 Invitations 0 Offline
S
Points 12 [Total 12] Ratings 1 Comments 2 Invitations 0 Offline
S
Points 10 [Total 10] Ratings 1 Comments 0 Invitations 0 Offline
S
Points 4 [Total 4] Ratings 0 Comments 4 Invitations 0 Offline
* Excludes moderators and previous
winners (Include)
Home | Contact | Blog | About | Terms | Privacy | © Purple Inc.