"What Are The Arguments For And Against The Use Of Fiscal Policy To Fight Inflation Lower Unemployment And Raise Gdp Keynesian And Monetarist" Essays and Research Papers

What Are The Arguments For And Against The Use Of Fiscal Policy To Fight Inflation Lower Unemployment And Raise Gdp Keynesian And Monetarist

government policy in reducing unemployment and inflation. In your discussion make use of the diagrammatic representation of the macroeconomy developed in lectures in Term 2 | Unemployment and inflation are factors that have negative effects on the performance of the economy as a whole. Therefore, policies to achieve low and stable price inflation, a high and stable level of employment are big macroeconomics issues of our time. This essay focuses on discussing the role of government policy on reducing...

Central bank, Fiscal policy, Inflation 1496  Words | 4  Pages

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Inflation and unemployment which is worse

INFLATION vs UNEMPLOYMENT Which is the Bigger Evil ? Firstly, what is inflation and what is unemployment ? Unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequently cited measure of unemployment is the unemployment rate.This is the number of unemployed persons divided by the number of people in the labor force, while inflation is the rate of change in the general level...

Economics, Inflation, Keynesian economics 2081  Words | 7  Pages

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Milton Friedman's Monetarist Theory

mixture of theoretical ideas, philosophical beliefs, and policy prescriptions, these theories can help elaborate on both historic and current financial situations. For instance, the general understanding of the monetarist theory, founded by economist Milton Friedman, focuses on macroeconomic activities that examine the impact of changes in the money supply and central banking. This economic school of thought theoretically challenges Keynesian economics (OnlineTexts) to contend that variations in the...

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Fiscal Policy for Reducing the Unemployment Rate

Fiscal Policy for reducing the unemployment rate The employment rate is quite an important variable to a country because it represents the country's economic situation is good or bad.In order to reduce the unemployment rate,both demand side policies and supply side policies can be used.On the demand side,there are fiscal policy and monetary policy.While on the supply side,there are many policies like improving labor market flexibility,employment subsidies,better education and training,lower employment...

Business cycle, Economics, Inflation 717  Words | 3  Pages

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Keynesian vs Monetarist Economy

Economics for Hospitality, Tourism and Leisure Keynesians versus Monetarists Faculty responsible: J. Heller Ismail EL HASSANI Humanity has known in its history long periods of growth with the Agrarian Revolution, the Industrial Revolution, the Oil era and now the Information’s one. From the last period of sustained growth is born the myth of continuous and eternal growth. However, the scarcity of natural resources and the awareness of the negative effects of economic...

Great Depression, Inflation, John Maynard Keynes 1957  Words | 6  Pages

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Inflation and Unemployment in Brazil

Inflation and Unemployment in Brazil In this section we will analyse Brazilian inflation and unemployment historical patterns in order to make prediction about their likely future behaviour in the short term; we will then see how this contributes to our investing decision. The country has experienced historically high levels of inflation, mainly due to a combination of large GDP growth (average of 10% during the 1960’s) and wrong policy measures such as the 1978 shift in nominal wage adjustment...

Brazil, Inflation, Interest 1401  Words | 4  Pages

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Fiscal Policys

Supplemental Unit 5: Fiscal Policy and Budget Deficits Fiscal and monetary policies are the two major tools available to policy makers to alter total demand, output, and employment. This feature will focus on fiscal policy, what it is and its potential and limitations as a tool with which to promote economic stability and strong growth. What is Fiscal Policy? When the supply of money is economic constant, government expenditures must be financed by either taxes or borrowing. Fiscal policy involves the...

Deficit, Government debt, Keynesian economics 2474  Words | 7  Pages

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Impact of Economic Growth and Employment Rate on Inflation

analysis of the impact of GDP growth rate and employment rate on inflation. For this purpose data from 1995 to 2008 has been collected and analyzed through OLS technique. The result of the model shows that GDP growth rate and employment rate adequately affect inflation. With the increase in GDP and employment, inflation decreases. INTRODUCTION Inflation is a burning issue in Pakistan. It is generally felt that for several years Pakistan has had a double-digit inflation. The public sector has used...

Economic growth, Economics, Inflation 1562  Words | 6  Pages

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Positive Inflation Rate

Definition In mainstream economics, inflation is a rise in the general level of prices, as measured against some baseline of purchasing power. The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates. In general, mainstream economists divide into two camps: those who believe that monetary effects dominate all others in setting the rate of inflation, or broadly speaking, monetarists, and those who believe that the...

Central bank, Economics, Inflation 2090  Words | 6  Pages

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Expansionary Economic Policy

Expansionary Economic Policy David Gors ECO203: Principles of Macroeconomics Nick Bergan April 14, 2013 In economic terms, a recession is defined as a general slowdown in economic activity. In an effort to move the economy out of a recession, the government would implement expansionary economic policies. One action the government would take would include conducting expansionary fiscal policy. The other action taken would be conducting expansionary monetary policy. Both of these actions would...

Central bank, Federal Reserve System, Inflation 1540  Words | 5  Pages

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Unemployment vs. Inflation

Inflation vs. Unemployment Inflation and unemployment are two key elements when evaluating the economic well-being of a nation, and their relationship has been debated by economists for decades. Inflation refers to an increase in overall level of prices within an economy; it means you have to pay more money to get the same amount of goods or services as you acquired before and the money becomes devalued. For example 10 dollars seventy years ago had the same buying power that 134 dollars have today...

Economics, Inflation, Keynesian economics 1140  Words | 4  Pages

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Monetarist and New Classical theories

Explain the evolution of the Monetarist and New Classical theories. The monetarist analysis of the economy places a great deal of stress on the velocity of money, which is defined as the number of times a dollar bill change hands, on average, during the course of a year. The velocity of money is the rates of nominal GDP to the stock of money, or V=GDP/M= (P x Y) (M. Alternately, M x V=P x Y). The New Classical model, firms are assumed to be perfectly aggressive “price takers”, with no control...

Aggregate demand, Deficit spending, Inflation 1464  Words | 4  Pages

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Government Intervention in the Economy: Are Monetary and Fiscal Stimulus Policies Possible Tools for Getting an Economy Out of a Recession

Subject Area: Economics Topic: Deficit Spending Essential Question: Should the government use instruments of monetary and fiscal stimulus policies to reactivate the economy? Imagine people living in parks called Bushville’s, lines for soup kitchens that go for blocks, and all across the country kids running away from home travelling on trains searching for your next meal. This is just a taste of what 2009 could have been, but thankfully, the year did not go down this way although it will be remembered...

Deficit spending, Economics, Great Depression 2526  Words | 6  Pages

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Fiscal and Monetary Policies

Fiscal and Monetary Policies Charles T. Sheridan Student ID: 4290575 ECON 102 American Military University Dr. John Theodore Economies everywhere in the world have fluctuations, there Gross Domestic Product (GDP) is either growing (economic boom) or it is not producing enough and falls into a recession. In a recession, an economy’s GDP suffers two consecutive quarters of negative growth. Personal consumption, government spending and the amount a country imports and exports measure GDP...

Economics, Federal Reserve System, Inflation 900  Words | 3  Pages

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What are the characteristics of Monetarism, and how did it come to dominate economic policy?

 What are the characteristics of monetarism, and how did it come to dominate economic policy? Monetarism was an “important set of ideas that did emerge from the transatlantic non liberal network during the 1950’s and 1960s.” [Jones, 2012] Monetarism is a mixture of theoretical ideas, philosophical beliefs, and policy prescriptions. Monetarism is based on the belief that the economy is inherently stable and that markets work well when left to itself. Therefore Government intervention can often...

Economics, Inflation, Keynesian economics 869  Words | 3  Pages

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keynesian economics

QUESTION Keynesian solution to unemployment was higher public spending which through the multiplier process would generate income and more jobs. Explain how this solution works and are there other solutions to the problem of unemployment? INTRODUCTION The world is facing a serious problem of unemployment it has become a major disturbance to the growth of the economy. In the world Libya is noted to have the highest rate of unemployed citizens. In Nigeria we have the problem of unemployment it has...

Business cycle, Economics, Great Depression 2284  Words | 7  Pages

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Fiscal Policy in the United States

Fiscal policy is the process the government uses to determine the appropriate level of taxes and spending necessary to deal with recessions, inflation, and unemployment. This is accomplished by the government deliberately making changes "…in either government spending or taxes to stimulate or slow down the economy" (Colander, 2004, p. 583). The methods used to accomplish such are identified as expansionary fiscal policy and contractionary fiscal policy. Expansionary fiscal policy can be used to bring...

Fiscal policy, Inflation, Keynesian economics 1020  Words | 3  Pages

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Keynesian Economics and Classical Economics

Differences Between Keynesian Economics and Classical Economics Economics thinking has evolved over time as economists develop new economic theories to fit the realities of a changing world. Monetary and fiscal policies change over time. And so does our understanding of those policies. Some economists argue that policies that lower the unemployment rate tend to raise the rate of inflation. Others insist that only unexpected inflation can influence real GDP and employment. If the latter economists...

Aggregate demand, Economics, Inflation 1022  Words | 3  Pages

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The Concepts and Measurements of Gdp

Information Technology Management, West Virginia College This research was performed by Valerie J. Rountree to support BUSN602 B001 SUM 11 – Assignment #5 – Managerial Analysis – Please assess the concepts and measurements of GDP, the business cycle, unemployment, inflation, and interest rates. Provide at least three specific examples. APA formatting required Correspondence concerning this article should be addressed to Attn: Valerie J. Rountree, American Public University System | 111 W. Congress...

Business cycle, Economics, Gross domestic product 664  Words | 3  Pages

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fiscal policy

confidence it needs to invest and innovate. But the function of fiscal policy is reduced for current Australian economy, because the world economies are more integrated than before, so the government should take another direction to recover the economy of Australian. Such as import and Export. (Words count: 948) Introduction For more than a decade now, many Western countries are suffered from high rates of unemployment as well as from considerable Federal budget deficits. Comparatively...

Economics, Economy, Inflation 1144  Words | 8  Pages

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FDI & Fiscal Policies

explanation - 1) Foreign Direct Investment – a) What is Foreign Direct Investment (FDI)? FDI is “investment for control” in a foreign country – foreign investment where control is acquire, vs. Portfolio Investment which includes purchasing securities or bonds of a firm without exercising control over the firm. Most Intl’ units (MFI, UNCTAD) classify an FDI if the foreign investor holds at least 10% of the firm’s equity. b) Why FDI? Because FDI will use existing: customer base, licenses, IP, workforce...

Income tax, Progressive tax, Proportional tax 1243  Words | 4  Pages

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Fiscal and Monetary Policy

the role and implementation of monetary and fiscal policies as tools of macroeconomic management to manage the Australian economy through the current global economic crisis. How does the government use fiscal and monetary policy to get Australia through the current global financial crisis Fiscal Policy - Fiscal policy is implemented through the use of a particular group of variables known as fiscal instruments. The instruments of fiscal policy are the expenditure and revenue variables...

Central bank, Economics, Inflation 1383  Words | 4  Pages

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Fiscal Policy

In economics, fiscal policy is the use of government expenditure and revenue collection (taxation) to influence the economy.[1] Fiscal policy can be contrasted with the other main type of macroeconomic policy, monetary policy, which attempts to stabilize the economy by controlling interest rates and the money supply. The two main instruments of fiscal policy are government expenditure and taxation. Changes in the level and composition of taxation and government spending can impact on the following...

Economics, Fiscal policy, Inflation 1209  Words | 5  Pages

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Monetary and Fiscal Policy

Monetary and Fiscal Policy The Monetary and Fiscal Policies, although controlled by two different organizations, are the ways that our economy is kept under control. Both policies have their strengths and weaknesses, some situations favoring use of both policies, but most of the time, only one is necessary. The monetary policy is the act of regulating the money supply by the Federal Reserve Board of Governors, currently headed by Alan Greenspan. One of the main responsibilities of the Federal Reserve...

Bank of England, Central bank, Federal Reserve System 931  Words | 3  Pages

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Fiscal and Monetary Policy

higher interest rate. [pic] Expansionary monetary policy or Contractionary monetary policy. a) To maintain the same level of output, what monetary policy should BSP implement? ANSWER: EXPANSIONARY MONETARY POLICY (Increasing money supply lowers interest rate) b) To maintain the same level of interest rate, what monetary policy should BSP implement? ANSWER: CONTRACTIONARY MONETARY POLICY (Reducing money supply results to an increase in interest...

Economics, Fiscal policy, Inflation 730  Words | 4  Pages

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The Keynesian Income – Expenditure Model

Question: “The Keynesian income – expenditure model assumes that the macro economy can be fine tuned and controlled in the same way as an engine in a car”. Evaluate the validity of this assertation. The economics is concerned of the production and consumption of goods or services. It also deals with the problem of scarcity. It can be divided into two sections, microeconomics and macroeconomics. The microeconomics deals the demand and supply for the individual part of the economy. The macroeconomics...

Economics, Inflation, John Maynard Keynes 2222  Words | 6  Pages

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Evaluating Fiscal Policy Alternatives

Evaluating Fiscal Policy Alternatives simulation Principles of Macroeconomics Evaluating Fiscal Policy Alternatives simulation Introduction Fiscal policy is whenever the government changes government spending or taxation as a means of influencing the market economy. This change takes place to stimulate or to restrain inflation. Fiscal policy is the manipulation of trends in the economy by the government. The content of this paper will discuss the effects of the changes in fiscal policy based...

Inflation, Keynesian economics, Macroeconomics 1254  Words | 4  Pages

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Arguments for and Against Joining the Euro

briefing document to provide arguments for and against the UK joining the Euro The single European currency was established in 1999 and since then the topic of whether the UK should join the Euro has been at the centre of many debates. This document will look at the arguments both for and against membership of the single currency and then provide a critical analysis on whether the UK should join the single currency. Arguments for and against joining the Euro |Arguments for joining ...

Central bank, Euro, European Central Bank 1198  Words | 4  Pages

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Keynesian Economic Theory

Major Schools of Economic Theory: Keynesian In laymen’s term, the main belief of Keynesianism is that when the free market fails, the government should spend money it doesn’t have to stimulate and balance the economy. Unlike Classicists, John Maynard Keynes believed that collective demand of the people determined the economy’s activity and that in adequate demand would lead to high, drawn out periods of unemployment. The theory was adopted post WWII by western nations (1950-1960’s) and later...

Economics, Great Depression, Inflation 2056  Words | 6  Pages

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Monetary Policy, Inflation and Growth

Monetary policy is the government or central bank process of managing money supply to achieve specific goals, such as constraining inflation, maintaining an exchange rate, achieving full employment or economic growth. Monetary policy can involve changing certain interest rates, either directly or indirectly through open market operations, setting reserve requirements, or trading in foreign exchange markets. It must be universally agreed that low and stable inflation is a primary and essential goal...

Central bank, Economics, Foreign exchange market 2438  Words | 7  Pages

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The Effect of Inflation on Gdp

chose for my project is “What effect does the inflation rate have on the gross domestic product (GDP) of the United States of America?” I would like to study the relationship between the inflation rate and the GDP and decide whether or not the GDP mimics the inflation rate. 2. This topic is interesting and important because it affects the monetary policy of the United States of America. The inflation rate affects everything from wages to the price of a cheeseburger. The GDP is the measure of a...

Economics, Economy of the United States, Great Depression 993  Words | 3  Pages

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Monetary Policy Effect on Macroeconomics

Monetary policy effect on Macroeconomics Monetary policy is the method by which the government, central bank, or monetary authority controls the supply of money, or trading foreign exchange markets. This policy is usually called either an expansionary policy, or a contractionary policy. An expansionary policy multiplies the total supply of money in the economy, and a contractionary policy diminishes the total supply. Expansionary policy is used to tackle unemployment in an economic decline by lowering...

Central bank, Federal Reserve System, Inflation 1354  Words | 4  Pages

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Raising the Inflation Target Rate to Evade the Zero Lower Bound

| Raising the inflation target rate to evade the Zero Lower Bound | Econ 134 GSI: Yury Yatsynovich | | Deepak Ravichandran | 4/17/2012 | | From its inception, the central bank’s onus has always been a dual mandate; to maintain maximum employment while at the same time keeping stable prices. While we as economists have learned much about the mechanism through which monetary policy affects the economy, much is still unknown about the inner workings of the economy, and the long-term...

Central bank, Deflation, Economics 1985  Words | 5  Pages

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Fiscal Policy

Fiscal Policy The people of the United States are by the fiscal policies. Team C will address the how and why the U. S. budget deficits, budget surpluses, and debt affect different individuals and institutions. There is a wide array of individuals affected by fiscal policy, which include tax payers, future Social Security and Medicaid users. The unemployed individuals and University of Phoenix students will be affected by fiscal policy. The U.S. financial reputation, an exporter, and importer...

Deficit, Economic policy, Government debt 1391  Words | 5  Pages

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Fiscal Policy

Fiscal Policy Fiscal Policy is a macroeconomic (influencing the whole economy) policy that can influence resource allocation, redistribute income and reduce the fluctuations of the business cycle. Government’s policy What is the expected outcome for the 2012-13 Budget? Give a brief explanation. 1.5 billion dollar surplus; from deficit to surplus. They are using contraction Fiscal policy. What is the expected outcome for the 2012-13 Budget? Give a brief explanation. 1.5 billion dollar surplus;...

Economic policy, Economics, Government debt 1295  Words | 5  Pages

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Discuss Alternative Government Policies for Reducing the Rate of Inflation in an Economy. (20 Marks)

If inflation is too high in an economy the government will introduce policies to reduce the rate as a high rate can lead to disaster for a country. If the UK has excessively high inflation rates then they will not be able to compete on the exportation of goods against other countries as we will be charging higher prices which can then lead to a contraction on UK output and we become less efficient. It is also disastrous for individuals as there will soon be a wage-inflation battle as wages need to...

Fiscal policy, Inflation, Keynesian economics 939  Words | 3  Pages

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Unemployment Rate Definition

UNEMPLOYMENT RATE DEFINITION The labour force is defined as the number of people employed plus the number unemployed but seeking work. The participation rate is the number of people in the labour force divided by the size of the adult civilian noninstitutional population (or by the population of working age that is not institutionalised). The nonlabour force includes those who are not looking for work, those who are institutionalised such as in prisons or psychiatric wards, stay-at home spouses...

Economics, Great Depression, Inflation 973  Words | 3  Pages

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Assignment 2 The Fiscal and Monetary Policy and Economic Fluctuations

Assignment 2 The Fiscal and Monetary Policy and Economic Fluctuations Dr. Emmanuel Obi The U.S. Economic Situation: A 5 Year Comparison Compared to five years ago, the U.S. economic situation has improved. The real gross domestic product (GDP), a macroeconomic measurement used to “summarize the total production of [the] entire economy” (O’Sullivan, Sheffrin, & Perez, 2012), has shown positive growth since the bottom point of the recent recession that occurred in 2009...

Central bank, Federal Reserve System, Great Depression 1571  Words | 4  Pages

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Immobility/Unemployment Essay

(10) Occupational immobility is a factor of immobility where there are barriers to the movement of factors of production between different sectors of the economy such as from the primary sector to the tertiary sector. These barriers lead to unemployment or an inefficient labour force. Geographical immobility is another factor immobility which has barriers preventing people from moving from one area to another to find work. Geographical immobility can also has a larger impact on the economy...

Economics, Economy, Inflation 1395  Words | 5  Pages

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The Keynesian School of Economics: an Overview

Question- 01: What was the historical background of the school? Answer: The Keynesian school, proponents of the branch of economics now termed as Keynesian economics had come into existence towards the beginning of the twentieth century. This school was arguably the first viable alternative to the Classical school of thought. The school argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector...

Business cycle, Economics, Great Depression 1750  Words | 5  Pages

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Controlling Inflation

can face, inflation is simultaneously the worst for society as a whole. Inflation can be defined as the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling (investopedia.com). Inflation is a sustained increase in the general level of prices. Since inflation is concerned with increases in the general level of prices, changes in the price of a single good or service cannot be characterized as inflation. The inflation rate is normally...

Central bank, Federal Reserve System, Inflation 2127  Words | 7  Pages

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Irelands Inflation Rate

rish IIreland Inflation Rate The inflation rate in Ireland was recorded at 1.20 percent in October of 2012. Inflation Rate in Ireland is reported by the Central Statistics Office Ireland. Historically, from 1976 until 2012, Ireland I.R averaged 5.3 Percent reaching an all time high of 23.2 Percent in October of 1981 and a record low of -6.6 Percent in October of 2009. In Ireland, the inflation rate measures a broad rise or fall in prices that consumers pay for a standard basket of goods. Ireland...

Government spending, Gross domestic product, Keynesian economics 806  Words | 3  Pages

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The Inflation

First of all, when we speak about inflation, we should make clear what is the exact defination of it. Inflation is one of the most important economic concepts. At its most basic level, inflation is simply a rise in prices. Over time, as the cost of goods and services increases, the value of for example of a dollar is going to go down because you won’t be able to purchase as much with that dollar as you could have last month or last year. When the purchasing power of a currency starts to decline...

Consumer price index, Economics, Inflation 959  Words | 3  Pages

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Inflation and Govt Expenditure

CHAPTER ONE INTRODUCTION 1.1 Background of the Study Persistent public expenditure and inflation have become major concerns in both developed and developing countries. Extensive theoretical and empirical literatures have been developed to examine the relationship between Public expenditure and macroeconomic variables. The monetarists share the view that fiscal deficits are harmful to an economy. While some of the increases in the public expenditure have been associated with declining tax...

Economic growth, Economics, Inflation 2255  Words | 7  Pages

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How Inflation Targeting Operates in the Uk and Critically Evaluate the Benefits of Inflation Targeting

Introduction “Inflation targeting is a monetary policy strategy used by central banks for maintaining prices at a level or within a specific range.”Financial Times (n.d.). The Central Bank meets the preset targets for the annual inflation rates by changing interest rates. Inflation and interest rates are closely related. The Central Bank, therefore, uses interest rates by lowering or raising them to the set target. For example, the bank will raise interest rates if inflation looks like it is above...

Bank of England, Central bank, Inflation 1646  Words | 5  Pages

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Explaination of Fiscal Policy, Government Expenses & Taxation

Fiscal policy can be determined as the use of government spending and taxes in order to alter the Gross Domestic Product (GDP). From the macro perspective, the federal budget is a tool that can shift aggregate demand and thereby alter macroeconomic outcomes. Although fiscal policy can be used to pursue any of the economic goals, we need to explore its potential to ensure full employment and observe the impact on inflation. The mix of output and distribution of income will determine the potential...

Economics, Government spending, Gross domestic product 2244  Words | 7  Pages

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Two Of The Most Implemented Policies Government Use To Achieve Economic Growth Are Monetary Policy And Fiscal Policy

Introduction According to a article by Rich Karlgaard from forbes. During the great recession. U.S economy was performing better then expected and was growing. From 2008 to 2010, U.S GDP is projected at 14.3 trillion, 14.2 trillion, 14.6 trillion. So how did this actually happen? Carl Schramm, who heads America’s top entrepreneurial think tank, the Kauffman Foundation, explain in a interview with the author: “The single most important contributor to a nation’s economic growth is the number of startups...

Fiscal policy, Inflation, Keynesian economics 1652  Words | 6  Pages

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Inflation

INFLATION The government control measures, all over the world, keep business cycles under control. What has gone nearly uncontrolled over the time is the problem of almost continuous increase in the general price level (this is the problem of inflation). The problem of inflation got accentuated since the early 1970s. It emerged as the most intractable economic problem for both theoreticians and policy-makeovers all over the world. Inflation has been a common problem of the developed and the developing...

Central bank, Economics, Fractional-reserve banking 1754  Words | 5  Pages

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Tighter Monetary/Fiscal Policy

Evaluate the effects of ‘tighter monetary and fiscal policy’ on any two-macreconomic objectives Monetary Policy involves changes in the base rate of interest to influence the rate of growth of aggregate demand, the money supply and ultimately price inflation. Fiscal policy involves the use of government spending taxation and borrowing to influence the pattern of economic growth and to affect the level of aggregate demand, real output and employment. The four major objectives are full employment...

Inflation, Interest rate, Keynesian economics 950  Words | 3  Pages

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Policies for Reducing Unemployment

Policies for Reducing Unemployment There are two main strategies for reducing unemployment - • Demand side policies to reduce demand-deficient unemployment (unemployment caused by recession) • Supply side policies to reduce structural unemployment / (the natural rate of unemployment) Demand Side Policies [pic] Demand side policies are important when there is a recession and rise in cyclical unemployment. (e.g. after 1991 recession and after 2008 recession) 1. Fiscal...

Economics, Fiscal policy, Inflation 989  Words | 4  Pages

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Stabilization Policy

| Stabilization Policy | ECO311E | | Glen Edwards 201102728 | | | Contents Introduction 3 What is Stabilization Policy? 3 Keynesian vs. Classical 4 Stabilization in South Africa 5 Conclusion 5 Reference list 6 Introduction In an era where growth and stability in the economy are at the forefront of economic discussions, the economic policies and principles that are utilized in keeping with a stable economy must be taken very seriously. The way in which the governments...

Business cycle, Economic policy, Economics 1345  Words | 4  Pages

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The Use of GDP to Measure the Business Cycle

 Eco/212 – Principles of Economics University of Phoenix Describe the use of GDP to measure the business cycle; ‘Gross Domestic Products’ affects the American business cycle, and keeps equilibrium in our economy. GDP measures two things to help in stabilizing our economy. The economy’s income and expenditure, these two tactics are used simultaneously in measuring the annual household income and how much each household spends on goods; this is a continuously repeated cycle in the flow of...

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Fiscal Deficit

India’s Fiscal Deficit and related issues: * India’s fiscal deficit is 5.2 % of India’s GDP. * Reduction in government expenditure allowed central banks to loosen monetary policy and effectively stimulate private investment and consumption. * Challenges in fiscal deficit- the existing fiscal deficit leaves no space for extra govt. spending on areas of social priority. It reduces the growth of human and physical capital. * It reduce the private sector’s ability to obtain bank financing...

Capital, Deficit, Economics 920  Words | 3  Pages

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Economic Policy - Questions

Questions economic policy • Point out the reasons why it's worth an economy has a low inflation Low inflation promotes the efficient use of productive resources . Conversely , when inflation is high time some individuals and some of the economic resources are invested in the search for mechanisms to fend off inflation. For example , when inflation is high, companies should allocate more resources to the management of its portfolio to avoid financial losses . These are unproductive uses that do not...

Central bank, Economics, Inflation 627  Words | 3  Pages

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Are Economic Policies of India Better Than That of China, Japan or Usa?

Are economic policies of India better than that of China, Japan or USA? When we talk about the economic policy, USA and China forms the two extreme ends of a curve. USA has a free and liberal market where government interference is negligible and believes that market forces will cater to all needs of people in optimum quantity and price, as per Adam Smith’s theory. While, couple of decades ago China was a firm communist country. Though now, it has liberalized market, government has significant...

Economics, Inflation, Interest rate 1021  Words | 3  Pages

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Causes of Inflation

CAUSES OF INFLATION Inflation is caused when the aggregate demand exceeds the aggregate supply of goods and services. We analyze the factors which lead to increase in demand and the shortage of supply. Factors Affecting Demand Both Keynesians and monetarists believe that inflation is caused by increase in the aggregate demand. They point towards the following factors which raise it. 1. Increase in Money Supply. Inflation is caused by an increase in the supply of money which leads to increase...

Central bank, Economics, Inflation 1403  Words | 4  Pages

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Money, Value of Money, Inflation and Policy Responses

Money, Value of money, Inflation and Policy Responses Inflation: Inflation is a sustained increase in the cost of living or the average / general price level leading to a fall in the purchasing power of money. Causes of Inflation:–There are a few different reasons that can account for the inflation in our goods and services; let's review a few of them. * Demand-pull inflation refers to the idea that the economy actual demands more goods and services than available. This...

Central bank, Economics, Inflation 2475  Words | 7  Pages

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Fiscal Policy

nation. There are many tools to stabilize the economy and reduce the frequency and the altitude of economic fluctuations. Among these tools are the fiscal policy and monetary policy. This report discusses the fiscal policy and why the governments use this too to stabilize the economy and encounter the economic fluctuations. Definition Fiscal policy is a macroeconomic tool used by the government through the control of taxation and government spending in an effort to affect the business cycle and...

Economic policy, Fiscal policy, Government debt 2035  Words | 7  Pages

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Monetary Policy as an Output Stabilizer

Monetary policy as an output stabilizer Monetary and fiscal policy are therefore interdependent, and it is difficult to analyse the stabilizing role of monetary policy in isolation. One way of avoiding this complex interdependence is to think of monetary policy as 'independent' in the short to medium run, but constrained by or constraining the fiscal deficit in the long run. This procedure also has the merit that monetary stabilization policy - to which we turn next - can be thought about separately...

Central bank, Economics, Inflation 2156  Words | 6  Pages

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Fiscal Policy

possible poverty as current negative cash-flow eats away at the integrity of future Social Security and Medicare. The effects of a high unemployment rate create a ripple effect that certainly will reach into the economy of coming years. Gross Domestic Product is affected as international trade and deficit fluctuate with the country’s interest rates, inflation, and dollar buying power. Even University of Phoenix students see the effect of these economic aspects in their tuition. Although these...

Deficit, Government debt, Inflation 1455  Words | 6  Pages

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