The objectives of long-run growth policy andshort-run stabilization policy.
Explanation of Solution
Major objective of long-run
Economic growth: Economic growth refers to an increase in the market value of goods and services over a period of time in an economy.
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Chapter 23 Solutions
Economics: Principles & Policy
- In a developing economy that primarily relies on agriculture, the government decides to implement a series of reforms aimed at liberalizing the financial sector, including easing restrictions on foreign bank entry. What is the most likely short-term impact of these reforms on the agricultural sector's access to credit? A) Increased access to credit for the agricultural sector due to enhanced competition in the banking sector. B) Decreased access to credit for the agricultural sector as foreign banks focus on more profitable urban and industrial clients. C) No significant change in access to credit for the agricultural sector, as foreign banks have minimal impact on local lending. D) A shift in credit allocation from large agricultural businesses to small-scale farmers due to diversified lending practices of foreign banks.arrow_forwardRole of government and financial intermediaries in the recovery – fiscal and monetary policies. Other factors such as global cooperation among countries in helping economic recovery.arrow_forwardContrary to what neoclassical economics has argued, many development economists believe that redistributing wealth or income can increase economic growth in developing countries. How?arrow_forward
- Examples of how monetary and fiscal policies can stimulate employment and facilitate economic growth in a country.arrow_forwardA converging economy is one that Group of answer choices is classified as a high-income country, setting the benchmark for economic growth does not experience inflation has the capacity to catch up with leaders in technology will probably be politically less tolerant of inflation than high-income countriesarrow_forwardA broader definition of macroeconomics and its relationship with the level of production, unemployment and inflation of a country.arrow_forward
- Are Structuralists' approaches to economic growth consistent with the Harrod – Domar theories of growth? How do they differ in emphasis?arrow_forwardEffect of fiscal and monetary policy on GDP growth in zimbabwearrow_forwardIn the context of development priorities, what are the relative roles of central banks , commercial banks, development banks, informal and unorganized sources of credit, and microfinance?arrow_forward
- The Lewis Theory of Economic Development is a structural change model. With the aid of the figure below, discuss the rationale of the model and how the theory proposes countries can achieve self-sustaining economic growth.arrow_forwardCritically comment on the current policy environment in India by evaluating any two recent policy reforms and their role in ensuring strong and sustainable growth in the countryarrow_forwardDo you think that the conventional economic system will create economic stability? Why or why not? Explain.arrow_forward
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning