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.
25,617,024 questions answered
Popular Conversations
Cancer is a disease of ____________________
Weegy: Cancer is disease caused by an uncontrolled division of abnormal cells in a part of the body. User: ...
6/24/2016 3:16:51 AM| 3 Answers
The kingdom Animalia includes all of these except A. ...
Weegy: Sponge lacks nervous tissue. User: Many bivalves, like scallops, live in salt water. The scallop ...
6/24/2016 4:21:37 AM| 3 Answers
Is solar energy renewable?
Weegy: Solar energy is renewable energy.
6/24/2016 3:12:48 PM| 2 Answers
Crediting of sources can also protect you from being accused of ...
Weegy: True User: Plagiarism damages reputations and relationships. True False User: To be charged with plagiarism ...
6/24/2016 6:47:18 PM| 2 Answers
In which empire was St. Petersburg ...
6/24/2016 12:25:01 AM| 1 Answers
In which empire was St. Petersburg ...
6/24/2016 12:29:14 AM| 1 Answers
Which of the following is an example of an ...
Weegy: STOMACH is an organ of the digestive system. User: Which of the following is not a specialized tissue found ...
6/24/2016 1:21:36 AM| 1 Answers
Weegy Stuff
S
P
L
Points 836 [Total 1497] Ratings 2 Comments 816 Invitations 0 Offline
S
Points 337 [Total 698] Ratings 2 Comments 317 Invitations 0 Offline
S
L
P
P
P
Points 151 [Total 3694] Ratings 0 Comments 151 Invitations 0 Offline
S
Points 135 [Total 416] Ratings 0 Comments 135 Invitations 0 Offline
S
Points 127 [Total 179] Ratings 0 Comments 127 Invitations 0 Offline
S
P
1
Points 107 [Total 852] Ratings 3 Comments 57 Invitations 2 Offline
S
L
Points 68 [Total 4188] Ratings 0 Comments 68 Invitations 0 Offline
S
Points 40 [Total 50] Ratings 1 Comments 30 Invitations 0 Offline
S
Points 32 [Total 139] Ratings 0 Comments 32 Invitations 0 Offline
S
1
L
L
P
R
P
L
P
P
R
Points 29 [Total 12596] Ratings 0 Comments 29 Invitations 0 Offline
* Excludes moderators and previous
winners (Include)
Home | Contact | Blog | About | Terms | Privacy | © Purple Inc.