General Economics

The Federal Government and the Federal Reserve Bank both use their respective policy tools to make “corrections” to the economy. As we learned, both entities are able to stimulate a sluggish economy, as well as “cool down” one that may be growing too quickly.

Using pages 537-540 in your textbook carefully read and consider both the case for active stabilization policy and the case against active stabilization policy.

    • Please respond to all of the following prompts below. Be sure to support your opinion with facts obtained from outside sources. Include the exact URL for citation purposes in your post.
    1. Which “side” are you on in terms of stabilization policy? Should the government and/or the Federal Reserve be actively involved in managing the economy? Why or why not?
    2. Do you agree with using “automatic stabilizers?” Why or why not?
    3. Do you think either political party is more inclined to favor using stabilization policy?
    4. Please remember to cite the text and any outside sources used.