Arguments based discussion on economic crisis, expansionary fiscal and monetary policies.
Currently, the extent of our economic difficulties has caused the economic policymakers to choose fiscal and monetary policies which are both expansionary. Though many economists believe this mix of policy is appropriate to our current circumstances, there are concerns of problems which these policies might create) Now which you have become a knowledgeable and critical consumer of financial and economic affairs, I want you to sort through the statements below to assess their plausibility given the concepts and models we have discussed this semester. If you believe the statements below are plausible, you should explain why you do so using ideas from the class. If you see them as implausible, you should argue why given the concepts discussed this semester.
a) These policies will restrict private, business investment spending given their impact on credit and interest rates, thereby limiting future long-term economic growth.
b) These policies will likely cause a weakening in the American dollar as a result.