Author Question: Explain why expenditure switching and expenditure reducing policies need to be used together. ... (Read 76 times)

silviawilliams41

  • Hero Member
  • *****
  • Posts: 560
Explain why expenditure switching and expenditure reducing policies need to be used together.
 
  What will be an ideal response?

Question 2

Nations that have only a single abundant resource face significant risks, even when that resource is highly valued.
 
  Indicate whether the statement is true or false



rosiehomeworddo

  • Sr. Member
  • ****
  • Posts: 306
Answer to Question 1

Policies that switch spending to domestic goods drive up aggregate demand, which is inflationary unless the economy is in the horizontal part of the aggregate supply curve. Expenditure reductions on their own are recessionary because they reduce aggregate demand without switching the composition of demand toward domestic producers. Thus to be successful, the policies must be used together.

Answer to Question 2

TRUE



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The toxic levels for lithium carbonate are close to the therapeutic levels. Signs of toxicity include fine hand tremor, polyuria, mild thirst, nausea, general discomfort, diarrhea, vomiting, drowsiness, muscular weakness, lack of coordination, ataxia, giddiness, tinnitus, and blurred vision.

Did you know?

For about 100 years, scientists thought that peptic ulcers were caused by stress, spicy food, and alcohol. Later, researchers added stomach acid to the list of causes and began treating ulcers with antacids. Now it is known that peptic ulcers are predominantly caused by Helicobacter pylori, a spiral-shaped bacterium that normally exist in the stomach.

Did you know?

HIV testing reach is still limited. An estimated 40% of people with HIV (more than 14 million) remain undiagnosed and do not know their infection status.

Did you know?

Certain rare plants containing cyanide include apricot pits and a type of potato called cassava. Fortunately, only chronic or massive ingestion of any of these plants can lead to serious poisoning.

Did you know?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

For a complete list of videos, visit our video library