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Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869 Exercise 7
The Bush-Greenspan policy mix
In 2001, the Fed pursued a very expansionary monetary policy. At the same time, President George W. Bush pushed through legislation that lowered income taxes
a. Illustrate the effect of such a policy mix on output.
b. How does this policy mix differ from the Clinton-Greenspan mix
c. What happened to output in 2001 How do you reconcile the fact that both fiscal and monetary policies were expansionary with the fact that growth was so low in 2002 (Hint: What else happened )
In 2001, the Fed pursued a very expansionary monetary policy. At the same time, President George W. Bush pushed through legislation that lowered income taxes
a. Illustrate the effect of such a policy mix on output.
b. How does this policy mix differ from the Clinton-Greenspan mix
c. What happened to output in 2001 How do you reconcile the fact that both fiscal and monetary policies were expansionary with the fact that growth was so low in 2002 (Hint: What else happened )
Explanation
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(a) A very expansionary monetary policy,...
Macroeconomics 5th Edition by Olivier Blanchard
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