Why is the demand side macroeconomic policy failing under the new normal of the economy?

Supply side: based on the balanced development of social reproduction? Therefore:

Side: Based on balance? Namely:

Balance between public and private. Regional equilibrium? In fact, it is a side public and a light selfishness?

Side city construction? Light manufacturing, agriculture. Malfunction?

Namely: imbalance. Imbalanced?

Summary. Hello, dear, your question is, what is the positive and negative macroeconomic policy, has been inquired for you: active fiscal policy, is conducive to driving economic development, but also shows that the current economic recession, the need for active fiscal policy.

Your question is, what is the positive and negative macroeconomic policy, has been inquired for you: positive fiscal policy, is conducive to driving the rapid development of the economy, but also shows that the current cover as early as the economic recession, the need for a positive fiscal policy.

The negative fiscal policy showed that the economy was a bit inflationary at that time, and it was necessary to curb inflation and tighten monetary policy.

Under the constraints of a low inflation rate, the economic policy that can enable the national economy to develop steadily and rapidly is called an economic policy that accumulates the economy, otherwise it is a negative economic policy.

However, the essence of a proactive fiscal policy is an expansionary fiscal policy, and when inflation gradually becomes a pressure affecting the development of the macroeconomic economy, the proactive fiscal policy should adjust its trend in a timely manner

Selected housewife's housework: not counted, household production and consumption are not included in GDP.

b Income from the auction of Picasso's drawings: not included, products not produced in the current period are not included in GDP.

c Income from helping neighbors take care of children at night: Included in the income received for labor services, and the wages received are factor income and included in GDP.

d Income from hardship allowance obtained from ****: not included, the subsidy to individuals belongs to the transfer payment of **, does not generate new market value, and is not included in GDP.

For example, if a society can produce $1,000 billion in products, but only $900 billion in products can be sold, then the actual output will only be $900 billion, so there will be $100 billion of production capacity idle, leaving workers and machines unemployed. On the contrary, if the total demand is as high as $1.1 trillion, but the society can only produce $1.0 trillion in products, excessive demand will inevitably lead to a general rise in prices and inflation.

Therefore, there are three possible states of short-run macroeconomic equilibrium:

1. Full employment equilibrium, when the output at the intersection of the aggregate demand curve and the short-term aggregate supply curve happens to be on the long-term aggregate supply curve, we call the macroeconomic equilibrium at this time the full employment equilibrium. At this time, resources are fully utilized and the unemployment rate is at the level of the natural rate of unemployment, which is the ideal state of the macroeconomy.

2. Lower than the equilibrium of full employment (unemployment equilibrium), that is, the real GDP determined by the macroeconomic equilibrium is less than the GDP at full employment, so that the enterprise is under-employed, and the unemployment rate is higher than the natural unemployment rate.

3. Inflation equilibrium, which is the real GDP determined by macroeconomic equilibrium is greater than the real GDP at full employment, and the real output exceeds the level of potential GDP, which promotes the rise of the highest level. The above analysis shows that it is difficult to achieve full employment equilibrium in macroeconomic equilibrium, and due to the spontaneous adjustment of market mechanisms, short-term fluctuations in the economy and business cycles have emerged.

FYI.

Hello, I'm glad to answer your <>

Regarding your question: In order to overcome market failure, make up for the defects or deficiencies of the market mechanism, and optimize the allocation of resources, the market failure should be intervened, and the ways and measures include: (1) in order to protect and promote competition and improve the efficiency of resource allocation, monopoly and unfair competition can be restricted by legal means; It is also possible to carry out public regulation of monopoly industries, mainly to regulate the products or services of monopoly industries - or to stipulate price limits, or to stipulate profit margins.

and 2) traditional approaches to eliminating externalities, including the use of taxes and subsidies, the means of internalizing externalities by merging related firms, and clarifying property rights. (3) In order to raise an appropriate level of public goods, ** assumes the responsibilities of the main proposers, such as national defense, public security, fire protection, and public health. (4) In order to solve the market failure caused by information asymmetry, the government has made specific laws and regulations on the description, quality standards and advertising of many goods, and also provides information services for consumers in a variety of ways.

** By formulating the right microeconomic policies, the impact of market failures on the operation of the economy can be eliminated to a large extent. However, it can also fail, which will lead to a greater waste of resources.