Explain the difference between active and passive policymaking.
What will be an ideal response?
Active policymaking, or discretionary policymaking, is a situation when fiscal and monetary policymakers act in response to or in anticipation of some change in the overall economy. They act so as to move the economy more quickly toward full employment and greater price stability. Passive, or nondiscretionary, policymaking is policy that follows some rule rather than one that tries to respond to or anticipate some change in economic activity.
You might also like to view...
Sabrina is a college professor in Houston, Texas who earns a salary of $95,000. She is single, just put down $25,000 on a new townhouse, and has no children. Explain if Sabrina has any way of reducing her payroll taxes or her personal income tax
What will be an ideal response?
Interest rates and the price of old or existing bonds are
A) directly related. B) independent of each other. C) inversely related. D) sometimes directly related and sometimes inversely related. E) There is not enough information to answer the question.
Briefly explain how public choice economists feel about the role of special interest groups in the government.
What will be an ideal response?
Explain how each of the following events would affect the aggregate demand curve
a. Lower interest rates b. A decrease in net exports c. A decrease in the price level d. Slower income growth in other countries e. A decrease in imports