Question

15a）When and why did macroeconomic policy-making begin?

Do you think it was right for the United States to use fiscal policy to lessen the strains of the Great Depression? Do you think that strategies we used 80 years ago are still relevant to the 21st century? EXPLAIN.

Answer 1

Macroeconomic policy-making begin in 1960s because of the inflation and short-run instability and to close the historical norm of long-run budget balance.

It was right for the United States to use fiscal policy to lessen the strains of the Great Depression as   government changed the levels of taxation and government spending, whereas it influenced the aggregate demand and the level of economic activity and thus brought stability in the economy. Strategies we used 80 years ago are still relevant to the 21st century as we are heading towards the same crisis (inflation, unemployment, slow growth rate) what we have gone through, although we also need some different strategies to counter the new economic threats.