Problem 27
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Section: CRITICAL THINKING QUESTIONS
Chapter 32: Macroeconomic Policy Around the World
Introduction
Monetary policy is a collection of tools that a country’s central bank can use to modify the liquidity in order to promote long-term economic development.
Fiscal policy would be the use of governmental income collections and spending to impact a nation's economy in political science and economics.
The Keynesian model is a viewpoint that emphasizes the shorter term and the importance of collective demand. The neoclassical model is a viewpoint that emphasizes the long term and the importance of collective supply.
The expansionary monetary policy is one that creates a setting in which interest rates are reduced and lending is encouraged as a result of the lower lending rates. Fiscal policies, on either hand, are those that include the administration’s spending and taxation.