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ME Critical Thinking Mod 5 - Essay Example

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ME Critical Thinking Mod 5 Policy-Impact-Recommendations In conventional terms, economic growth refers to the growth in real GDP of a certain country (Lawn, 2011). Therefore, conventionally economic growth refers to either growth in terms of real output or growth of the economy…
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ME Critical Thinking Mod 5

Download file to see previous pages... Several economists have regarded income inequality as one of the major concerns. Therefore one cannot ignore the importance of alleviation of income inequality to achieve long term economic growth. It can even be stated that increases in income inequality in the short term will lead to decrease in income inequality in the long term. The US government has taken some initiatives in order to stimulate economic growth of the nation. They have taken the initiative to persuade the private sector to make investments in green technologies. Such type of technologies uses low carbon. Such a policy was followed with the view to restore the confidence of the investors through green investments as well as innovation (Grantham Research Institute on Climate Change and the Environment, 2012). The government currently is not in a position to offset the private savings through extra borrowing. But they have the capability to restore the confidence of the investors if they can choose the right instrument with the view to stimulate private investment. Such type of low carbon investments will surely improve the quality of life by not only creating job opportunities but the environment will also reap the benefits of low carbon emission. In order to make the first policy regarding investments in green technologies to be much more successful some initiatives from the part of the government like providing some kind of subsidy or relaxation for the investors can be taken. Such actions will act as the incentives for the investors. The loans for students in the country of US are backed by the government. The loans usually carry a fixed rate of interest but there have been cases where the rates remained high in spite of the overall rate being low. It has been expected that the reform on student loans will discourage adults for further education and women were expected to suffer most (Murray, 2012). The policies of student loans do not seem to upgrade the quality of life as the rates of interest is significantly high. The interest rates for the students must be the same for all and low as well. If the interest rate is high they are not going to opt for the loans and the economy as a whole will suffer. It is necessary to keep the interest rates low and more and more needy students are to be driven under the purview. The forces of globalization reshaped the global economy. Some of the experts opined that the expanding free trade policy of the government will open up new jobs opportunities. The exports of the country will find its place in the foreign markets and the competitiveness will get boosted. The policy of free trade and that of trade liberalization will open up more opportunities for the exports of the country and so the policy is expected to be gainful for the economy. There are two folds benefits from free trade. The short term advantages include lower consumer prices, wider potential of consumers as well as larger investments in the sector that enjoy comparative advantage. Thus the dead weight loss is reduced (Department of Business Innovation and Skills, 2012). Free trade has the potential to create expanded markets for the export sector in the long run. Globalization driven by trade has reached by unprecedented pace. It has laid down the path of creating new opportunities that contribute in accelerating economic growth and reduce the level of poverty. Policymakers have clinched the liberalization of trade in course of time because such policies seemed to enhance economic ...Download file to see next pagesRead More
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