federal government adopted a fiscal policy that involved tax cuts and increased spending on stimulus packages to revive different sectors of the economy. However, the federal government revised this policy to the extent that…
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The fiscal policy has been instituted to see the government earn more revenue which is to be used to reduce the government debt which has been rising over the years especially following the release of stimulus packages to revive the economy after the financial crisis began. The fiscal policy currently in place disfavours the rich as it would see them pay more taxes. The middle class are also disfavoured by the fact that they have to pay 2% higher payroll tax than they have previously been paying. If not for the easy monetary policy that the country has adopted, many sectors of the economy would have been grossly affected by the financial policy and the unemployment levels would remain high. Generally, the fiscal policy will benefit those to whom the government is indebted.
The Taiwan Government on has adopted an expansionary fiscal policy for the last seven years (Liu, 2013; weebly.com 2014). The policy includes raising spending on defence each year by 7.8%. The policy is aimed at stimulating domestic demand (weebly.com 2014). This measure has been taken in response to volatile exports. The government intends to invest in infrastructure and hopes that the economic growth will be more impressive. The policy favours local businesses and the general population although the government’s level of debt will keep rising.
Mutikani, L. (March 22, 2013). Easy Fed softens fiscal policy punch on economy. Chicago Tribute. Retrieved March 14, 2014 from http://articles.chicagotribune.com/2013-03-22/business/sns-rt-us-usa-economy-growthbre92l03o-20130321_1_easy-policy-monetary-policy-monetary-stimulus
Liu, F. (2013).Taiwan Fiscal Policy to Stay Expansionary in 2014, With More for Infrastructure: Outstanding Public Debt Likely to Rise Close to the Statutory Limit. Wall Street Journal. Retrieved March 14, 2014
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This recession made the federal government under the leadership of president Obama to come up with a stimulus package program in the year 2009. The package was commonly known as fiscal policy and it was focusing at economic stimulation via financing government project to create direct employment opportunities.
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
Monetary policy on the other side refers to actions that can be taken by the central bank to either slow or ignite the economy. Both Fiscal and monetary policies have a way of affecting the economy either positively or negatively. With reference to the
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
This has forced the US government to initiate a series of measures aimed at rectifying the debt burden of the United States. One such measure is the creation of a committee responsible for finding ways to solve the debt deficit problems of United States. This committee
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
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
This model analyses the supply of goods and services a nation can produce in a given period and the corresponding amounts of goods and services that will be purchased at all possible levels. The Fiscal policy
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