James Cook University - BX2022: Macroeconomic Policy (Solutions)

Changes to the interest rate or government expenditure levels intend to change business and consumer behaviour. The sought-after skill to correctly anticipate such changes requires an in-depth knowledge of monetary and fiscal policy, which this subject provides. The subject evaluates the views of various schools of thought on the desirability of conducting monetary and fiscal policy using current real world policy dilemmas. The subject provides important skills to students in economics, to students interested in international trade and to students interested in banking and finance.

After completing the subject, you will be able to:

• apply theoretical models to demonstrate the effects of fiscal and monetary policy in a closed or open economy;
• identify the trade-offs that governments and central banks must negotiate when conducting fiscal and monetary policy and predict their decisions;
• and - analyse and interpret macroeconomic (national accounts) data for a selected country to advise whether its current fiscal and monetary policy stance is appropriate.