Fiscal Policy Must Do Its Part for Income Growth: Amarnath

The video discusses Gross Labor Income (GLI) and its implications for the Federal Reserve's policy framework, contrasting it with the current inflation-centric approach. It explores the roles of monetary and fiscal policies in economic growth, the challenges of achieving inflation targets, and the importance of job and wage growth. The discussion also covers the impact of deficits on demand generation, the effects of minimum wage laws, and alternative policies like the earned income tax credit.

What does GLI stand for in the context of the Federal Reserve's policy discussion?

• Global Lending Index

• General Loan Interest

• Gross Labor Income

• Government Liability Insurance

What is the main challenge the Fed faces with its current 2% inflation target?

• Increasing the target to 3%

• Reducing the target to 1%

• Meeting the target consistently

• Exceeding the target consistently

How does the Fed's current approach to interest rates relate to job and wage growth?

• The Fed is ignoring job and wage growth trends

• The Fed is lowering rates to decrease wage growth

• The Fed is maintaining rates to support job and wage growth

• The Fed is aggressively raising rates to curb job growth

What is a key difference between inflation and wage growth as economic indicators?

• Both are lagging indicators

• Inflation is a leading indicator, while wage growth is lagging

• Wage growth is a leading indicator, while inflation is lagging

• Both are leading indicators

What role does fiscal policy play in supporting economic growth according to the discussion?

• It has no role in economic growth

• It only affects short-term economic cycles

• It complements monetary policy in fostering income growth

• It solely focuses on reducing inflation

How can tax cuts targeted at lower-income individuals impact economic demand?

• They only affect corporate savings

• They increase economic demand

• They have no effect on economic demand

• They decrease economic demand

What is a potential downside of raising the minimum wage according to the discussion?

• It can lead to increased automation

• It has no impact on employment

• It reduces overall wages

• It always leads to job losses