Question

In: Economics

What are the policy options that will bring the economy back to the long run steady...

What are the policy options that will bring the economy back to the long run steady state equilibrium along with Shelter in Place?

Will these policies that will return us steady state be one time or do they need to continue to combat the after effects of the virus?

Solutions

Expert Solution

There are various policy options that will bring the economy back to the long-run studies state equilibrium along with shelter in place it means in the economy the policies like monetary policies and fiscal policies are important to retain and bring back the economy in the study state.
Monetary policies include quantitative measures and qualitative measures where bank rate, open market operations, CRR, SLR, the repo rate, reverse repo rate are given and in the qualitative measures margin requirement direct action moral suasion are given these policies are helpful in maintaining the stability in the economy because these policies are very important to control the excess and deficit of money supply in the economy and which is very important for the investment and for the purpose of increase the productivity in the economy.
Fiscal policy in the economy is also very important to control the inflationary and deflationary situation in the economy because the fiscal policy is a very good policy to control taxation and the government expenditure as tools for the excess demand and deficient demand in the economy.
These policies are helpful and the economy will returner's study state of study after the effects of the virus.
The main problem in the economy is the production-consumption and distribution so to bring out all the functions in a proper manner it is very important to implement all the economic policies in a structured framework and it will definitely cover up the economic problems and to control the economy and maintain it into a study state.


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