What has been, and what will be, the short-run and long-run impact of the Federal fiscal policy that has been followed in the past few years?
To answer this question, you need to look back at the last 10 years of fiscal policy, and pick one (ONLY 1) policy - I repeat, only 1! Initial responses with more than one policy will not count for your initial response. This will ensure that everyone has an opportunity to pick a different policy and we can have a nice robust discussion.
Discuss the ramifications of the policy, presenting either a historical, or current example from the business perspective, and feel free to chime in on other policies and relate how the policy that you have chosen may be impacted by other policies.© BrainMass Inc. brainmass.com October 17, 2018, 4:38 am ad1c9bdddf
The Economic Stimulus Act of 2008 had both short-run and long-run consequences, many of which were unexpected. During the 2007-2008 recession, an expansionary fiscal policy was enacted, which provided stimulus payments to all taxpayers. Stimulus payments are money-in-hand for the taxpayer. The taxpayer has to do nothing to qualify, except to file an income tax return, which is how the stimulus payment is generated. Basically, the taxpayer files their tax return, and the stimulus payment is then sent to the taxpayer. Single taxpayers were given average stimulus payments of $600 for an individual and $1,200 for a married couple. The point of the stimulus check is to give the taxpayers money, and the taxpayers then take that money and go out and spend it in the economy. Because it is a recessionary ...
The solution provides a detailed discussion examining what has been and will be the short-run and long-run impact of the Federal fiscal policy that has been followed in the past few years.
1.If the Euro costs $1,5841 Canadian, what is your cost for a E200pair of showes?
2.If the canadian dollar depreciates by 10 percent, how much more do the shoes cost?
3.If Bombardier sells its aircraft in U.S. dollars, 70 percent of its cost are production are U.S.dollar-denominated, by 30 percent of its costs are Canadian-dollar-denominated does it benefit or lose from unexpected Canadian dollar appreciation? How can it "hedge" against losses from unexpected changes in the value of Canadian dollar?
4.How has the recent strength of the Canadian dollar affected the profitability of the Ottawa Senators?
5.IF you bought NOrtel stock at $2.50 a share, what was your rate of return if the share price rose to $3.00 in 30 days? Would you alter if you also received dividend payments? What if the same scenario occurred with respect to the stock of an American Firm?
6. Why is there an inverse relationship between the current dollar/euro exchange rate and the expected dollar return on euro deposits?
7. How do you draw equilibrium in the foreign exchange market?
8.When is the forward exchange rate equal to the expected future spot exchange rate? Why does this imply for exchange rate movement?
9.Why do higher interest relates for a particular currency deposit cause that currency to appreciate? How does this explain the current strength of the canadian dollar relative to the U.S. dollar?
10. Why do expected future exchange rate changes cause the current exchange rate to change in the same direction?
11. Does interest parity still hold if any profits from exchange rate ?
12. What is exchange rate pass-through?
13.What are the differences between permanent and temporary government policies in the short-run and long run?
14.What are the differences between Monetary and fiscal policies in the short run and long run? Which of the two is more effective?
15.Why might a government use a temporary policy in the short-run, even when the economy is at full employment? Does this fit with your knowledge of the policies that the Liberal Government implemented prior to the canadian federal elections in the fall of 2001?
16.Why would a government use a temporary policy to address a short run shock in the economy?
17. When would a government use permanent fiscal expansion or monetary expansion effectively? How do price adjustment impact on the success of such or do they?View Full Posting Details