https://padlet.com/LimLynNa/16S413_DM2 Writing Skills en-us 2017-02-22 04:01:25 UTC 2017-03-07 05:00:20 UTC hello@padlet.com https://padlet.com/LimLynNa/16S413_DM2/wish/155365864 The Problem

- Duration; very long (compare temporary vs long term periods of neg growth) -LT--> too costly for the govt --> unsustainable -->  might lead to govt budget deficit (G>T) --> govt might borrow to fund expenditure --(elaborate on crowding out effect or problem of increasing debt which lowers investor confidence)

]]> 2017-02-22 06:21:01 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155365864 https://padlet.com/LimLynNa/16S413_DM2/wish/155365867 Pump priming  -> increase G(expansionary FP) --> increase AD + adj process.
Outcome : multiplied increase real op/income, rise in GPL (state of economy?),  increases N
 ]]> 2017-02-22 06:21:05 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155365867 https://padlet.com/LimLynNa/16S413_DM2/wish/155365957 Crowding out effect
Gov may borrow money from banks to spend. Increased demand of loans cause interest rates to go up . Higher interest rates cause decrease in Volume of investment (why?). The decrease in investment will then cause the ad curve to shift left. Thus the rightward shift of ad curve due to increase in G will be limited by the leftward shift in ad due to decrease in investments. [So, in such a case should the government continue with pump-priming policy? why?]]]> 2017-02-22 06:22:20 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155365957 https://padlet.com/LimLynNa/16S413_DM2/wish/155366201 Severity of problem
if more severe, bigger burden on govt expenditure, govt have to spend more [need to elaborate on problem of opp cost or increasing govt budget deficit]]]> 2017-02-22 06:25:12 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155366201 https://padlet.com/LimLynNa/16S413_DM2/wish/155366551 Time lags
(in comparing the various types of policies, FP in terms of increasing G would impact AD most directly, quickest to impact AD --> most appropriate/effective policy if an urgent solution is required.)]]> 2017-02-22 06:30:21 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155366551 https://padlet.com/LimLynNa/16S413_DM2/wish/155366578 the govt might take a look at the govt budget position. for example, the govt would want to look at whether they have idle resources to inject funds into the economy . The govt may face a problem of severe budget deficit under a case of recession. Thus, they might not have ample resources and money for such a policy. or even, if they have idle resources, they will  have to consider the opp cost incurred should they have to forgo other types of spending such as Healthcare and education which are merit goods.]]> 2017-02-22 06:30:44 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155366578 https://padlet.com/LimLynNa/16S413_DM2/wish/155418574 However, effectiveness of increasing G may be limited due to a small multiplier size k. For instance, if the country (such as SG) is a relatively more open economy , where marginal propensity to import is high, K tends to be small. Each round a smaller proportion of additional income created is returned to inner flow as Cd generating smaller  additional streams of income and expenditure. Thus, with a smaller value of k, the less effective the policy is in increasing national income and the government require to increase their pump priming by a larger extent, which might lead to a strain on the the country's resources. Thus, the lower the size of k the less effective the policy and thus the government should look at other policies.]]> 2017-02-22 12:26:26 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155418574 LimLynNa https://padlet.com/LimLynNa/16S413_DM2/wish/155660691 2017-02-23 05:11:24 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155660691 LimLynNa https://padlet.com/LimLynNa/16S413_DM2/wish/155662977 2017-02-23 05:51:12 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155662977 LimLynNa https://padlet.com/LimLynNa/16S413_DM2/wish/155663101 1) Nature of economy
2) Extent of Govt budget deficit/surplus
3) Severity of recession
....]]> 2017-02-23 05:52:47 UTC https://padlet.com/LimLynNa/16S413_DM2/wish/155663101