Discussion Question

On this assignment I have to answer the posts that my classmates have posted in the classroom. Can you please help me answer them? Thanks.

• 1-Fiscal Policy is a government spending policy that influences macroeconomic conditions. With this policy, regulators attempt to improve unemployment rates, control inflation, stabilize business cycles and influence interest rates in an effort to control the economy.

• 2-I found the key insight to the Keynesian AS/AD model to be interesting.  According to Colander, the Keynesian model theory is based on an economy ability to stray from producing at its highest output.  This deviation can be correct by government intervention with demand-side polices by changing interest rates and money supply.  The government can also intervene by increasing or decreasing taxes or change government spending which will slow down or stimulate the economy.

• 3-A company could be experiencing “tremendous growth” for many reasons. When the economy is doing exceptionally well, companies can experience a boom which is characterized by a large jump in output. The unemployment rate is low, productivity increases, sales increase, demand increases and wages increase. However, what goes up, eventually must go down. Booms are typically followed by downturns, whether slight or steep. 

The current company is stable. The new company is seeing growth. There are peaks and valleys in every company. I would rather work for a company that has upward steady growth during most economic times. They weather storms and are less volatile.

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