We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

The Global Economy - Assignment Example

Comments (0)
The Global Economy Name: Institution: THE GLOBAL ECONOMY 1. Discuss what is meant by Fiscal Policy. (3 marks) Fiscal policy can be defined as the government’s schedule for tax implementation and spending to influence the economy for that fiscal year. Each year the government introduces fiscal policy principles to cope with problems that the economy faces and for the improvement of the society in general (Auerbach, 2009: p…
Download full paper
The Global Economy assignment
Read TextPreview

Extract of sample
The Global Economy

Download file to see previous pages... Changes in spending or taxes can be said to be revenue neutral, and could be construed to be fiscal policy or could have an effect on aggregate output level through changing incentives faced by individuals or firms face. Contrarily, fiscal policy is normally utilized to refer to the effect of overall taxation and spending levels on the aggregate economy, especially the gap between the two. Fiscal policy can be said to be tight if spending is lower than revenue or loose when revenue is lower than spending (Auerbach, 2009: p. 24). Usually, the centre of attention does not revolve around the deficit levels but on deficit changes. It is a vital tool for the administration of the economy since it has the capability to affect total GDP. 2. What are the instruments of fiscal policy? Evaluate the effectiveness of increasing government spending and tax cuts as a means of stimulating aggregate demand (4 marks). 276 The tools of fiscal policy are government expenditure, direct and indirect taxes, deficit financing through printing of new notes and government borrowing, subsidies, and transfer payments such as scholarships, stipends, and unemployment allowances (Hansen, 2011: p. 65). Aggregate demand is referent to total spending by government, businesses, households, and foreigners on final services goods that are domestically produced. The AD curve is descriptive of buying behavior for final services and goods in the aggregate. The relationship between rate of inflation and the amount of final services and goods that individuals are willing to purchase is in converse with other factors held constant. The AD curve shifts when there is an alteration in total spending on services and goods. An increase in total spending leads to a shift in the AD curve to the right (Hansen, 2009: p. 76). Inflation Increase AD AD1 AD Therefore, total spending changes and the AD curve shifts when consumption is changed, for example, through government spending, investment, tax cuts, or net foreign spending. The AD curve shifts to the right when taxes are cut and government expenditure increases (McEachern, 2009: p. 23). There is an increase in household spending, increased business spending, increased purchases by foreigners, decreased imports and purchases of foreign products by the domestic market and increased money supply. If the government increases spending and keeps taxes as they were, aggregate demand increases directly. In addition, if governments cut taxes, disposable income increases and more is spent on consumption. This rise in consumption leads to raised aggregate demand. However, the ability for this fiscal policy to use aggregate demand to influence output levels wears off with time. Increased aggregate demand because of this fiscal policy shows up, eventually, in higher prices without increasing output. In the long term, the output level is determined by factors of supply, rather than demand (McEachern, 2009: p. 23). 3. Explain, using the statistics of government expenditure, personal taxation rates and transfer payments, what fiscal policy stance did the 2012 Federal Budget take? (5 marks)...345 The government is also set to increase transfer statements by increasing by $1.8 billion family payments with approximately one million families set to get an increase of $300 annually and approximately 700,000 families with more ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
Global Branding Assignment
Therefore, global branding is successful marketing gimmick for the attraction of customers. Subsequently, global branding creates an illusion of superior quality in the minds of customers who consider the products of the company as being superior due to the global branding status.
6 Pages(1500 words)Assignment
Assignment on Management in a New Global Economy
The company’s intention for changing the product is for reducing their Inventory costs and distribution expenses. The change of the product line has had an impact on sales and company recognizes the real problem and they return in their old marketing
4 Pages(1000 words)Essay
The Changing Global Economy ( ECON401 )
The impact spread beyond the financial system hitting the prosperity, economic growth and jobs throughout the world. The crisis was caused due to the failure of many banking sector
21 Pages(5250 words)Assignment
Find Wikipedia links related to Global economy
Although Wikipedia has provided some information on Africa’s history, current conditions and the major economic sectors, this information is not complete and comprehensive. For instance, this article does not explain the role of ICT in driving
1 Pages(250 words)Assignment
Global economy Midterm Review Questions
Unfortunately, these policies led to increase in debt burden across many developing nations since many countries were unable to pay the loans obtained from World Bank and IMF. Race to the bottom is
2 Pages(500 words)Assignment
Global Study Assignment
The country should put in more efforts to complete its science and technological reforms and come up with a system based on true achievements, which rewards
1 Pages(250 words)Assignment
Global Study Assignment
The modern techniques of navigation gave rise to colonies in North America, Australia, Brazil, Indian sub-continent etcetera. China has set up colonies in African states of Zambia, Senegal, Liberia and Sierra Leone. The trade between the
1 Pages(250 words)Assignment
Global Study Assignment
The author gives an example of the 9/11 scenario that saw the world only getting one side of the story that focused on the terrorist activities and they being the sole offenders
1 Pages(250 words)Assignment
This drop in oil rates can be explained by taking into account factors like the decrease in global demand and surge in the world’s oil production, the oil “price war” between
9 Pages(2250 words)Assignment
Policy makers of Africa, Latin America, South Asia and Eastern Europe are looking forward to implement this type of trade policy. By liberalizing the trade policy, Chile’s economic growth has improved and thus elevated to seven percent. Chile’s trade policy is
5 Pages(1250 words)Assignment
Let us find you another Assignment on topic The Global Economy assignment for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us