The US economy is coming out of the most severe recession since the Great Depression and the economy need as much support as it can get. This would involve both monetary and fiscal policies. I agree with Raymond Burke about lower interest rates because that should encourage investment and consumption.
I don’t agree with Patricia Lopez with selling bonds and raising bank reserves, this would lead to more restrictive lending and reduced economic growth.
I don’t agree with Kathy Lee with reducing government spending because this would cause economic decline in the GDP. With less money going into the economy means higher prices and higher unemployment.
I agree with Allison Taney putting money into circulation by paying investors who have bonds keeps the money supply increasing. I do not agree with Allison on increasing the interest rate because this will put restrictions on lending and could reduce economic growth.
The government needs to apply expansionary fiscal policy. Monetary and fiscal policy is two ways in which the government attempts to achieve full employment levels, price stability and economic growth. Monetary policy is the responsibility of the Federal Reserve System that uses three instruments which include the discount rate, open market operations and reserve requirements that manipulate the money supply and interest rates. The economy needs direct stimulus form the government since the monetary policy can provide incentives to businesses and households to spend. A higher aggregate demand will help increase our real GDP.
Fiscal policy decisions are made by the President and Congress and use government spending and taxation o influence the economy. The government should not raise taxes in the short run since it will hurt spending power of the people but a long term plan should be created to offset the deficit.
This is not a situation that