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Evaluation of macroeconomic policies
Transcript of Evaluation of macroeconomic policies
macroeconomic policies By the end of the lesson you will be able to:
1. understand that the use of one macroeconomic policy can alter the impact of another
2. evaluate the short run and long run impact of such effects
3. make value judgements over the choice of policy Side effects of policies Watch this video on Greece How could changes in the interest rate affect the distribution of income Can monetary policy affect AS? How could changing the interest rate effect the balance of payments? Contractionary Fiscal Policy: Conflicts between fiscal and supply side policies There can be many conflicts between macroeconomic policies Inflationary or deflationary? What would you do if you were in charge?? Homework: Examine the potential conflicts between macroeconomic policies that policy makers may encounter when trying to control the economy. (30) Hint: Short term/long term. Activity: Watch this video on supply side policies. For each example of a supply side policy, I would like you to write down any conflicts with other policies or objectives. What would you do??