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.

Government Fiscal Policy/Budget Deficits and the National Debt - Assignment Example

Free

Extract of sample
Government Fiscal Policy/Budget Deficits and the National Debt

Whereby, the policy employs two major tools namely; increasing or decreasing government spending and taxes in order to achieve certain economic goals. In order to arrest the situation, the federal government utilized expansionary fiscal policy measure by increasing the levels of spending through buying securities such as; treasury bills and bonds from members of the public. This led to an increase in aggregate demand which consequently led to an increase in economic growth as well as high levels of employment (Amadeo, 2013). This means that fiscal expansionary measure helped to close the recessionary gap as illustrated in diagram A. In addition, the federal government reduced income taxes to reduce. Connectively, the federal government further utilized transfer payment which is actually the amount of money paid to the households without working for that money (Baumol, & Blinder, 2011). Diagram A LRAS SRAS GDP Price Deflator Recessionary Gap AD Source: Author Real GDP The above diagram indicates how the stimulus package (fiscal policies) helped to stimulate economic growth and employments. Whereby, expansionary fiscal policies such as increase in government spending, transfer pavements and taxation caused the aggregate demand curve (AD) to shift towards the right. However, if the federal government could have failed to pass the stimulus package (fiscal policy), research indicates that the recessionary gap could have widened up due to lower aggregate demand. This means that the levels of

Check these samples - they also fit your topic

Free Market System and Arguments in its Favour
This assessment will also include market failure and the steps United Kingdom government has taken to avoid market failure. Free Market System and Arguments in its Favour Free market system of resource allocation is based on the principles of supply and demand (Gregory & Stuart, 2003).
12 pages (3000 words)Assignment
Analysis on Saudi Arabia's Fiscal Policy and the Oil Prices
Reacting To Falling Oil Prices and the Global Economic Downturn 5. The Hidden Energy Crisis 5.1 Overview 5.2 Saudi Arabia Consumption Problem 5.3 Impact on the International Oil Market 5.4 Escalating Demand and Social Insecurity 5.5 The Role of Energy Prices 5.6 The Cost to Society 6.
16 pages (4000 words)Assignment
Fiscal Policy
lies to actions undertaken by the Federal Reserve System in order to have influence over the cost of money, availability of money and credit in an aim to promote national economic goals. The Federal Reserve System should continue its role in controlling money supply as it
2 pages (500 words)Assignment
U.S. National Debt

The conclusion from this study states that it would be substantial if the country creates new ways of paying its debts and increasing its national income. According to the research findings, it can, therefore, be said that this would lead to economic growth that creates job opportunities and better spending.

1 pages (250 words)Assignment
Fiscal Policy
The country had to contend with a cut of roughly 85 billion USD to in a bid to sequester the government’s debt. The country also adopted a policy to the effect that wealthy Americans will have to pay even more
1 pages (250 words)Assignment
Fiscal Policy and Its Implications in Belgium
The government uses this policy in affecting the economy. When a state experiences recession, the government might lower tax rates to fuel economic growth. If the people pay their taxes, they have the money to spend or invest and with increased consumer spending, an
2 pages (500 words)Assignment
Monetary Policy, Fiscal Policy, Business Cycles, and Economic Growth
Multinational corporations in Malawi will reduce their investments. Foreign Direct Investment stimulates economic growth and reduces the level of poverty. So a decrease in foreign direct
2 pages (500 words)Assignment
American National Government
The first born son is named Adolf Hitler, after the infamous Nazi dictator. The second born is named JoyceLynn Aryan Nation, the third born is named Honszylynn Hinler Jeanie while the last born is named Eva Lynn Brown, after
2 pages (500 words)Assignment
Monetary policy&fiscal policy
f whether the program has anything to contribute towards the direction of the economy declined to it having much contribution stating that the view of Fed in the economy is concerned about what has been for some time. He views this as being middling. He notes in relation to
2 pages (500 words)Assignment
Government borrowing, government budgets and fiscal policy impact
ends up by cutting on the amount of tax it charges, people will tend to increase their rate of spending hence allowing them to buy more imported goods and service, hence increasing the rate at which the government borrows funds from financial institutions in other countries as
1 pages (250 words)Assignment
economic activity could have declined and hence, causing the levels of unemployment to escalate (Baumol, & Blinder, 2011). Classical economic theory asserted that the economy can correct itself during recession without government intervention. This may be attributed to the law of demand and supply. Whereby, if the supply for labor or economic resources increases the prices will decline and vice versa. This means that, the economy can correct itself without government intervention. However, the above classical economics theory may work properly if factors affecting demand and supply are held constant which may not always be the case (Reuss, n.d). Connectively, fiscal policies had a significant impact on increasing the size of the budget deficits and the national debt. This is because the stimulant package increases government spending, taxes as well as transfer payments. This means that, huge government spending caused a deficit as the federal government injects more money into the economy. In addition, reduction in household income taxes could be attributed to an increase in budget deficit. Additionally, fiscal policies may have caused an increase in both local and foreign debt because; the federal government could borrow from private sectors by asking local banks to sell bonds to them. On the contrary, foreign debts increases as the government obtain funds from institutions such as International monetary funds and World Bank (Devereux, Choi, Devereux & International Monetary Fund, 2005). Students Responses In order to address recessionary problem, the government should have employed both fiscal and monetary policy tools. Secondly, federal government should try to provide incentives and subsidies to promote growth of local industries. This may help to address the problem of unemployment as well as promote economic growth. Part 2: Budget Deficits and the National Debt Budget deficit may be differentiated from the nation debt in the sense that, budget
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Government Fiscal Policy/Budget Deficits and the National Debt Assignment”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1484098-government-fiscal-policy-budget-deficits-and-the
(Government Fiscal Policy/Budget Deficits and the National Debt Assignment)
https://studentshare.org/macro-microeconomics/1484098-government-fiscal-policy-budget-deficits-and-the.
“Government Fiscal Policy/Budget Deficits and the National Debt Assignment”, n.d. https://studentshare.org/macro-microeconomics/1484098-government-fiscal-policy-budget-deficits-and-the.
  • Cited: 0 times

Summary

Government Fiscal Policy/Budget Deficits and the National Debt Name: Institution: Course: Tutor: Date: Part 1: Government Fiscal Policy The United State experienced a severe recession between 2007 and 2009 that affected not only the U.S economy but also the entire glob…
Government Fiscal Policy/Budget Deficits and the National Debt
Read TextPreview
Comments (1)
Click to create a comment or rate a document
dp
dpurdy added comment 2 months ago
Student rated this paper as
I had an issue with a assignment types of works. All until I came across this website and this particular essay. Even though "Government Fiscal Policy/Budget Deficits and the National Debt" is far from my interests, the structure is so great that I use it all the time as an example for my own works.
Let us find you another Assignment on topic Government Fiscal Policy/Budget Deficits and the National Debt for FREE!
Contact us:
+16312120006
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