Question

In: Economics

Two macroeconomic objectives are maintaining the level of economic growth and level of unemployment Identify key...

Two macroeconomic objectives are maintaining the level of economic growth and level of unemployment

  • Identify key problems which may be encountered when the government attempting to balance the level of unemployment and maintain the level of economic growth objectives
  • Evaluate the macroeconomic measures, employing fiscal and/or monetary policies, which could be taken to balance these two objectives.

Solutions

Expert Solution

Balancing act if unemployment vis-a-vis economic growth is catch 22 situation as for example when unemployment goes low in US in 2019 the economic growth bounced back causing inflation to go high as side effects as seen in Phillips curve phenomenon.

Now due to Coronavirus in 2020, the unemployment has reached higher nd economic growth has come down massively which means even inflation is low to all time lowest levels after 2008 crisis.

In such situation, government and central bank adopt an expansionary fiscal policy and expansionary monetary policy by which unemployment reduces, aggregate consumption rises and aggregate demand too causing GDP and Inflation to rise.

However government creates higher supply of food products bringing down Inflation as aide effects.


Related Solutions

One of the main macroeconomic objectives of any country in the world is economic growth as...
One of the main macroeconomic objectives of any country in the world is economic growth as measured by the gross domestic product (GDP) per capita from one year to the other. 5.1 Critically evaluate whether the government’s main objective should be economic growth. 5.2 Discuss ANY FIVE (5) sources of economic growth in any country of your choice. .
What do the different growth models identify as the key determinants of economic growth? Identify two...
What do the different growth models identify as the key determinants of economic growth? Identify two key limitations of the neoclassical growth model in explaining contemporary developing country experiences. Finally, compare and contrast Neoclassical, Marxian and Keynesian economic theories.
1. why governments or decision makers try to achieve the two macroeconomic objectives (maintaining stable and...
1. why governments or decision makers try to achieve the two macroeconomic objectives (maintaining stable and sustainable economic growth , and maintaining an acceptable level of inflation) ? 2. what are key problems which may be encountered when attempting to balance these two objectives?
2. Economic growth. Two key sources of economic growth have been due to increases in resources...
2. Economic growth. Two key sources of economic growth have been due to increases in resources and increases in productivity. a. Please discuss 5 factors that might contribute to falling U.S. GDP growth rates into the future, b. Explain in detail, what we could do to avoid each of the 5 factors causing our GDP growth rates to fall. c. Please discuss 5 factors that might contribute to rising U.S. GDP growth rates into the future, d. Explain in detail,...
Identify the two major ways economic growth is measured.
Identify the two major ways economic growth is measured.
Describe the inherent struggle between Economic Growth and Unemployment. Why are these two constantly at odds?...
Describe the inherent struggle between Economic Growth and Unemployment. Why are these two constantly at odds? Explain thoroughly. What is the most ideal Unemployment Rate, and why? What would be the future outcomes for the economy if we created too many jobs and the Unemployment Rate dropped to low?
Explain the relationship between the unemployment rate and economic growth, and why the unemployment rate is...
Explain the relationship between the unemployment rate and economic growth, and why the unemployment rate is or is not significant to the economy.
a) What are the two key approaches used in the new economic growth theories to explain...
a) What are the two key approaches used in the new economic growth theories to explain why their theories are different from the established Neoclassical Growth theory. b) Explain the fundamental determinants of long-term economic growth for an economy.
Two related long-term concepts are those of economic growth and the natural rate of unemployment. Frequently,...
Two related long-term concepts are those of economic growth and the natural rate of unemployment. Frequently, policymakers target these well-known indicators. (a) Explain how the following policy actions affect the rate of economic growth. i.Investment tax credits encourage firms to increase spending on research and development. ii.Marginal tax cuts combined with increased government spending cause the federal budget deficit to rise. iii.Increased access to government grants allow greater access to higher education and vocational training. Identify how the f b)...
Explain why productivity growth, saving and new technologies are crucial for maintaining economic growth. Describe how...
Explain why productivity growth, saving and new technologies are crucial for maintaining economic growth. Describe how immigration and property rights influence economic growth
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT