First, briefly explain what is meant by a policy mix. Second, explain what effect different policy mixes might have on the level of output, investment, and the interest rate.

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02-03-2020
Business

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First, briefly explain what is meant by a policy mix. Second, explain what effect different policy mixes might have on the level of output, investment, and the interest rate.

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ruthuchegbu ruthuchegbu · Answer 1 · 2020-03-03T03:26:09+01:00

Answer:policy mix

Explanation: Policy mix is the combination of a country fiscal policy and monetary policy for the growth and development of the country. Fiscal policy and Monetary policy are determine by the central bank and government respectively.The policy aim is to increase growth and decrease unemployment.

There are two policy which fiscal and monetary policy can create desire effect. First when the degree of imbalance is not completely clear,in this case if the fiscal and monetary policy is both tight the macro economy will be subjected to ups and down. As so,a mix of expansionary fiscal policy and tight monetary policy reduces the policy risk and may help to rebalance economy growth.

priyankatutor priyankatutor · Answer 2 · 2021-12-31T11:38:10+01:00

The investment, asset's rate, and employment decrease with the increase in the rate of taxes in the country.

Policy Mix:

It refers to the Fiscal and monitory policy that regulates the economic growth of the country.

Fiscal policy is regulated by the federal government while the monitory policy is regulated by the central bank.

When taxes and the interest rate increase by the government and the bank respectively this discourage the investment which results in the decreased rate of assets.

Therefore, the policy mix affects the investment, asset's rate, and employment in the country.

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