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|
Asked 9/6/2013 6:14:13 PM
0 Answers/Comments
Get an answer
New answers

There are no new answers.


There are no comments.

Add an answer or comment
Log in or sign up first.
22,388,448 questions answered
Popular Conversations
How are you?
10/6/2015 7:39:51 AM| 6 Answers
Which structure's primary function is to warm and moisten the air? ...
Weegy: A chronic respiratory disease where airways in the lungs become inflamed because of sensitivity to certain ...
10/6/2015 11:55:25 AM| 4 Answers
what is 5+4+6-2
10/6/2015 10:37:15 PM| 3 Answers
First Amendment User: Right to bear arms
10/6/2015 12:01:26 AM| 2 Answers
2. Eustress is a form of
Weegy: Eustress is a form of positive stress.
10/6/2015 1:51:48 AM| 2 Answers
Under__________________ jurisdiction cases can be heard only in the ...
Weegy: The court that first hears a case is said to have ORIGINAL JURISDICTION. User: What is ...
10/6/2015 5:51:18 AM| 2 Answers
Who was a Filipino nationalist who rebelled separately against the ...
Weegy: A mix of all nationalities and ethnic backgrounds. User: What did Taft do to help restore order in the ...
10/6/2015 8:46:06 AM| 2 Answers
coal, oil, and natural gas is example of what
10/6/2015 9:02:25 AM| 2 Answers
In 1790, George Washington wrote in a letter, "My station is new; ...
Weegy: A. becoming the first president of the United States User: The Bill of Rights was a reflection of the work ...
10/6/2015 9:38:36 AM| 2 Answers
Weegy Stuff
Points 151 [Total 1691] Ratings 0 Comments 151 Invitations 0 Offline
Points 62 [Total 738] Ratings 0 Comments 62 Invitations 0 Offline
Points 49 [Total 9807] Ratings 0 Comments 49 Invitations 0 Offline
Points 12 [Total 3874] Ratings 0 Comments 12 Invitations 0 Offline
Points 11 [Total 62] Ratings 1 Comments 1 Invitations 0 Offline
Points 10 [Total 10] Ratings 1 Comments 0 Invitations 0 Offline
Points 10 [Total 346] Ratings 1 Comments 0 Invitations 0 Offline
Points 8 [Total 439] Ratings 0 Comments 8 Invitations 0 Offline
Points 7 [Total 290] Ratings 0 Comments 7 Invitations 0 Offline
Points 1 [Total 1] Ratings 0 Comments 1 Invitations 0 Offline
* Excludes moderators and previous
winners (Include)