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Quiz 12 :
Financial Crises, Panics, and Unconventional Monetary Policy

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Quiz 12 :
Financial Crises, Panics, and Unconventional Monetary Policy

An engineering model hasThe modern scientific models are more important. A deductive scientific model is one, which has carefully specified formal foundations, whose primary purpose is to understand with the objective of understanding. A standard macro models better characterized as engineering models are rough and ready models that worked in the past. They usedModern macro models are best described as deductive scientific models. Example: The modern macro model tells us, that the discretionary monetary and fiscal policy will not work. The modern macro models are carefully framed with

No, it isn't true that expansionary fiscal policy during times to recession has had "all costs and no benefits". A fiscal policy is a government policy dealing with budget especially taxation and borrowing. When the economy is in recession government can start various development programs and also reduces taxes. When government spends on the infrastructure, the businesses and individual are better able to save money. This expenditure in case of tight fiscal policy would have been made them otherwise. Moreover, when the government reduces taxes, it increases disposable income in the hands of the people and thus they are better able to spend or save. Thus expansionary fiscal policy provides more money to people and businesses that pumps up the aggregate demand. In-fact, it helps an economy to come out of recession.

An engineering model hasA deductive scientific model is one, which has carefully specified formal foundations, whose primary purpose is to understand the objective, its implications and functioning of the model. Modern macro models are best described as deductive scientific models. Example- the modern macro model tells us that the discretionary monetary and fiscal policy will not work. The modern macro models are carefully framed with