{"id":351,"date":"2024-05-30T03:23:26","date_gmt":"2024-05-30T03:23:26","guid":{"rendered":"https:\/\/course.oeru.org\/maec102\/?page_id=351"},"modified":"2024-05-30T03:23:26","modified_gmt":"2024-05-30T03:23:26","slug":"further-issues-around-fiscal-policy","status":"publish","type":"page","link":"https:\/\/course.oeru.org\/maec102\/learning-pathways\/fiscal-policy\/further-issues-around-fiscal-policy\/","title":{"rendered":"Further Issues around fiscal policy"},"content":{"rendered":"<div id=\"content\" class=\"mw-body container\" role=\"main\">\n<div class=\"row\">\n<div class=\"col-md-12\">\n<div class=\"panel\">\n<div class=\"panel-body\">\n<div id=\"bodyContent\">\n<div id=\"mw-content-text\" lang=\"en\" dir=\"ltr\" class=\"mw-content-ltr\"><div class=\"panel iDevice\">\n\t<div class=\"panel-heading idevice-heading\">\n\t\t<div>\n\t\t\t<img decoding=\"async\" class=\"pedagogicalicon\" alt=\"activity\" src=\"https:\/\/course.oeru.org\/maec102\/wp-content\/themes\/oeru_course\/idevices\/Icon_activity.png\">\n\t\t<\/div>\n\t\t<div>\n\t\t\t<h2>A macroeconomic goal: Employment rate<\/h2>\n\t\t<\/div>\n\t<\/div>\n\t<div class=\"panel-body\">\n\t\t<div class=\"col-md-12\">\n\t\t\t<\/p>\n<div class=\"thumb tright\">\n<div class=\"thumbinner thumbnail\" style=\"width:252px;\"><a href=\"https:\/\/wikieducator.org\/File:Federal_reserve_bank_of_chicago.jpg\" class=\"image\"><img loading=\"lazy\" decoding=\"async\" alt=\"\" src=\"https:\/\/upload.wikimedia.org\/wikipedia\/commons\/a\/af\/Federal_reserve_bank_of_chicago.jpg\" width=\"250\" height=\"305\" class=\"thumbimage img-responsive\"><\/a>  <\/p>\n<div class=\"thumbcaption\">Federal Reserve Bank: Chicago<\/div>\n<\/div>\n<\/div>\n<p>In this section we&#8217;d like you to read three short texts on issues surrounding fiscal policy:\n<\/p>\n<ul>\n<li> Read Section 5 of Macroeconomics, Chapter 17 from Openstax College, which looks at <a rel=\"nofollow\" class=\"external text\" href=\"http:\/\/cnx.org\/contents\/QGHIMgmO@10.233:2dot0aeD@6\/Automatic-Stabilizers\">Automatic Stabilizers<\/a> and explains actions the government enacts to adjust the economy.\n<\/li>\n<li> Use <a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/saylordotorg.github.io\/text_principles-of-macroeconomics-v2.0\/s15-03-issues-in-fiscal-policy.html\">Section 3: Issues in Fiscal Policy<\/a>, from Principles of Macroeconomics: &#8220;Chapter 12, as an opportunity to become familiar with the problems and controversies involved in choosing and implementing fiscal policy. Can you think of an example of &#8220;crowding out&#8221; that you have read about?\n<\/li>\n<li> Read only the portion of <a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/saylordotorg.github.io\/text_principles-of-macroeconomics-v2.0\/s14-02-problems-and-controversies-of-.html\">Section 2<\/a> of Chapter 11: Problems and Controversies of Monetary Policy from Principles of Macroeconomics, which describes the several lags involved with the use of macroeconomic policy. Among them are the recognition lag, the decision lag, and the implementation lag. You need to place each of these lags in a timeframe and gain information about the complexity of action or inaction.\n<\/li>\n<\/ul>\n<p>\n<\/p>\n<p>\n\t\t<\/div>\n\t<\/div>\n<\/div><\/p>\n<p>\n<\/p>\n<div class=\"panel iDevice WEquizMultipleChoice WEquizMix\">\n\t<div class=\"panel-heading idevice-heading\">\n\t\t<div>\n\t\t\t<img decoding=\"async\" class=\"pedagogicalicon\" alt=\"assessment\" src=\"https:\/\/course.oeru.org\/maec102\/wp-content\/themes\/oeru_course\/idevices\/Icon_qmark.png\">\n\t\t<\/div>\n\t\t<div>\n\t\t\t<h2>Rationale for GDP: A monetary measure<\/h2>\n\t\t<\/div>\n\t<\/div>\n\t<div class=\"panel-body\">\n\t\t<div class=\"col-md-12\">\n\t\t\t\n<p>Now take this short quiz to see if you understood the readings, in each case, the try to answer the following questions about financial policy implementation.\n<\/p>\n<ul>\n<li> Data on the economy which is more accurate and more speedily available should enhance the use of fiscal policy by reducing the length of the recognition lag..\n<ul>\n<li> True\n<ul>\n<li> <b>Correct<\/b>.  More accurate and speedily available data would tend to enhance and make the use of fiscal policy as a stabilization tool easier.\n<\/li>\n<\/ul>\n<\/li>\n<li> False\n<ul>\n<li> <b>Incorrect<\/b>.\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li> Identify the lag that lead to the US Federal Bank reacting to the July 1990 recession in October of the same year.\n<ul>\n<li> Impact Lag\n<ul>\n<li> <b>Incorrect<\/b>.\n<\/li>\n<\/ul>\n<\/li>\n<li> Recognition Lag\n<ul>\n<li> <b>Correct<\/b> The recognition lag: the Fed did not seem to \u201crecognize\u201d that the economy was in a recession until several months after the recession began..\n<\/li>\n<\/ul>\n<\/li>\n<li> Decision Lag\n<ul>\n<li> <b>Incorrect<\/b>.\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li> What lag explains how, after the Fed finally recognized that there was a recession and doing something about it, investments started to take off in 1992 and then again in 1993.\n<ul>\n<li> Impact Lag\n<ul>\n<li> <b>Correct<\/b>. The impact lag: investment did not pick up quickly after interest rates were reduced. Alternatively, it could be attributed to the expansionary monetary policy\u2019s not having its desired effect, at least initially, on investment.\n<\/li>\n<\/ul>\n<\/li>\n<li> Recognition Lag\n<ul>\n<li> <b>Incorrect<\/b>.\n<\/li>\n<\/ul>\n<\/li>\n<li> Decision Lag\n<ul>\n<li> <b>Incorrect<\/b>.\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Did you get the right answers? If not, perhaps you should revisit the readings again.\n<\/p>\n<p>(<a href=\"https:\/\/wikieducator.org\/File:Comment.gif\" class=\"image\"><img loading=\"lazy\" decoding=\"async\" alt=\"Comment.gif\" src=\"\/\/wikieducator.org\/images\/d\/db\/Comment.gif\" width=\"16\" height=\"16\" class=\"img-responsive\"><\/a>:<span style=\"color: green; background-color: #F6F9ED\"> There&#8217;s a problem with the bullet lists.<\/span>)<\/p>\n<p>\n<\/p>\n<p>\n\t\t<\/div>\n\t<\/div>\n<\/div><\/p>\n<p>\n<\/p>\n<p><!-- \nNewPP limit report\nCPU time usage: 0.105 seconds\nReal time usage: 1.011 seconds\nPreprocessor visited node count: 213\/1000000\nPreprocessor generated node count: 1194\/1000000\nPost\u2010expand include size: 13920\/2097152 bytes\nTemplate argument size: 10000\/2097152 bytes\nHighest expansion depth: 9\/40\nExpensive parser function count: 0\/100\n--><\/p>\n<p><!-- Saved in parser cache with key we_en-mw_:pcache:idhash:182633-0!*!*!*!*!2!* and timestamp 20240530032325 and revision id 1035860\n -->\n<\/div>\n<div class=\"visualClear\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"row\">\n<div class=\"col-md-12\">\n<ul class=\"pager\">\n<li class=\"previous\">\n            <a href=\"\/maec102\/learning-pathways\/fiscal-policy\/issues-around-fiscal-policy\">\u2190 Previous<\/a>\n          <\/li>\n<li class=\"next\">\n            <a href=\"\/maec102\/learning-pathways\/fiscal-policy\/national-debt\">Next \u2192<\/a>\n          <\/li>\n<\/ul><\/div>\n<\/p><\/div>\n<div id=\"wenote-ids\"><script type='text\/javascript' id='wenotes-ids'>\n    var WEnotesSite = \"https:\/\/wikieducator.org\";\n    var WEnotesPath = \"\/Macroeconomics_activity_and_demand\/Further_Issues_around_fiscal_policy\";\n    var WEnotesSiteID = \"0e3d258fbd36841f92259eefcd41d5e9\";\n    var WEnotesPathID = \"6575924662a3c7f717cf801d1f75002b\";\n    var WEnotesIDs = { site: \"https:\/\/wikieducator.org\", path: \"\/Macroeconomics_activity_and_demand\/Further_Issues_around_fiscal_policy\", site_id: \"0e3d258fbd36841f92259eefcd41d5e9\", path_id: \"6575924662a3c7f717cf801d1f75002b\" };\n<\/script><\/div>\n<\/div>\n<footer><\/footer>\n","protected":false},"excerpt":{"rendered":"<p>\u2190 Previous Next \u2192<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":343,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-351","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/course.oeru.org\/maec102\/wp-json\/wp\/v2\/pages\/351","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/course.oeru.org\/maec102\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/course.oeru.org\/maec102\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/course.oeru.org\/maec102\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/course.oeru.org\/maec102\/wp-json\/wp\/v2\/comments?post=351"}],"version-history":[{"count":1,"href":"https:\/\/course.oeru.org\/maec102\/wp-json\/wp\/v2\/pages\/351\/revisions"}],"predecessor-version":[{"id":352,"href":"https:\/\/course.oeru.org\/maec102\/wp-json\/wp\/v2\/pages\/351\/revisions\/352"}],"up":[{"embeddable":true,"href":"https:\/\/course.oeru.org\/maec102\/wp-json\/wp\/v2\/pages\/343"}],"wp:attachment":[{"href":"https:\/\/course.oeru.org\/maec102\/wp-json\/wp\/v2\/media?parent=351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}