1. Discuss the effects of fiscal and monetary policy on
inflation. Illustrate with good examples
2. You have AED 1000 as a cash money and AED 500 in traveler's
checks. Also, you have AED 1000 in checking account at Dubai
Islamic Bank. At the same bank you put AED 5000 in savings account.
Based on this information illustrate how you can change your M1 and
M2.
Monetary Policy and Fiscal Policy
A healthy economy typically has low rates of unemployment and
steady prices. Low rates of unemployment means that the economy is
operating at its full potential. To ensure the economy continues to
operate at potential GDP (full capacity where all savings are
invested in production functions, and where all those who wish to
work can find a job, and all other factors of production are fully
utilized in the production function), governments use fiscal and...
9. “Under fixed exchange rates the monetary policy is
impotent, but the fiscal policy is effective.” Do you agree?
Explain.
10. “Chronic budget deficits mean ever-accumulating,
unsustainable public debt.” Do you agree? Explain why or why not.
Make sure to address the following questions in your essay:
a. What is the relationship between public deficits and
debt?
b. What is meant by “sustainable debt”? How do you know
whether the public debt sustainable?
c. How is it possible for chronic...
Which of the following best describes the difference between
monetary policy and fiscal policy?
Monetary policy is quicker to implement but has a longer effect
lag than fiscal policy.
Monetary policy is slower to implement but has a longer effect
lag than fiscal policy.
Monetary policy is quicker to implement but has a shorter effect
lag than fiscal policy.
Monetary policy is slower to implement but has a shorter effect
lag than fiscal policy.