Archive for August, 2008

Can they do something about the budget deficit? Is there a relationship between Fiscal and Monetary Policy?

Dott asked: There is no doubt that Fed, the Central Bank of the United States, plays enormous and often successful role in the economy.


What fiscal policy actions would you recommend at the following instances?

sjgeekboy asked: a. The economy begins at potential, but foreign economies slow dramatically
b. The economy has been operating above potential output and inflationary pressures rise.
c. A new technology is invented that significantly raises potential output.


How has monetary and fiscal policies affected the home construction industry?

No Name asked: ?


What’s good about lowering taxes under the fiscal policy and lowering interest rates under monetary policy?

kiyo-kyo asked: What’s the effect on future inflation?
President Bush has decided to pass out tax rebates and lower the income taxes while Ben Bernanke are lowering hte interest rates on the bank borrowings.