Macroeconomic Situation Issues Related to Essay

Total Length: 360 words ( 1 double-spaced pages)

Total Sources: 2

Typical monetary policy to control inflation will be difficult for two reasons according to Fleckenstein. First, because the economy recovery is likely to be very fragile, the government will be reluctant to increase interest rates in the short run. Further, given the size of the government deficit, the government will also not want to increase interest rates because it would increase the interest burden.

To avert the disastrous scenario predicted by Fleckenstein, the government needs to change course.

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It needs to stop relying on so much government spending for economic recovery. It should also consider increasing taxes on the very wealthy to reduce its debt burden. This group has a low Marginal Propensity to Consume, so paying more taxes shouldn't impact their consumption which is so critical to this country's GDP......

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"Macroeconomic Situation Issues Related To", 07 October 2009, Accessed.22 May. 2025,
https://www.aceyourpaper.com/essays/macroeconomic-situation-issues-related-18831