In an effort to move the economy out of a recession, the federal government would engage in expansionary economic policies. Describe the actions the government would take in conducting expansionary fiscal policy and expansionary monetary policy.
Expansionary Fiscal Policy:
Review Chapter 7: Classical Macroeconomics and the Keynesian Challenge and Chapter 9: Taxes, Government Spending, and Fiscal Policy.
Explain the actions the federal government would take while engaging in expansionary fiscal policy in terms of the following:
- The necessary change in taxes and government spending,
- The effect on aggregate demand, GDP, and employment.
Expansionary Monetary Policy:
Review Chapter 12: Banking and The Federal Reserve System and Chapter 14: Monetary Policy In Theory And Practice.
Identify the three tools available to the Federal Reserve Bank (The Fed) when conducting monetary policy. Explain whether the Fed would:
- Increase or decrease the required reserve ratio
- Increase or decrease the discount rate
- Buy or sell government securities when conducting expansionary monetary policy
Explain how these actions would affect the money supply, interest rates, spending, aggregate demand, GDP, and employment.
Writing the Final Paper
The Final Paper:
1.Must be 5 to 6 double-spaced pages in length and formatted according to APA style as outlined in your approved style guide.
2. Must have a cover page that includes:
a. Title of paper
b. Student's name
c. Course name and number
d.Instructor's name
e. Date submitted
3. Must include an introductory paragraph with a succinct thesis statement.
4.Must address the topic of the paper with critical thought.
5.Must conclude with a restatement of the thesis and a conclusion paragraph.
6. Must use at least four scholarly resources, including the textbook. Two references must come from the Ashford Library.
7.Must use APA style as outlined in your approved style guide to document all sources.
8.Must include, on the final page, a Reference List that is completed according to APA style as outlined in your approved style guide.