quora
Nobody downloaded yet

Government Economic Policy - Essay Example

Comments (0) Cite this document
Summary
Economic policies are measures taken by the government to influence the behaviour of an economy, there exist two types of policies that government use to influence the economy and they include the fiscal policy and the monetary policies.
Fiscal policies include taxation and government spending; the monetary policy will include money supply and other measures that influence the amount of money circulating in an economy…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92% of users find it useful
Government Economic Policy
Read TextPreview

Extract of sample
"Government Economic Policy"

Download file to see previous pages Governments main objectives of using this type of policies is to stimulate the aggregate demand, reduce inflation, improve a recession, collection of revenue to provide public goods, improve on market failure caused by externalities or even steer the economy to achieve higher growth.
as earlier discussed the main objectives of government policies is to improve on a recession, depression, inflation, solve on market failure caused by positive and negative externalities, collection of government revenue to provide public goods and to stimulate aggregate demand. These policies will also be used in case of a boom in the economy. The policies can be used together to improve a situation or one of them used.
Inflation can be defined as the consistent rise in the general prices of goods for a fairly long period of time, the most used indicator of inflation is the consumer price index. Inflation is caused by demand push according to Keynes; he argued that inflation will exist when the aggregate demand exceeds aggregate supply. The excess demand can be from the real sector or the monetary sector.
TheThe real sector consist of the model that is used to calculate the national output, Y = consumption + government spending + investment + exports - imports. if marginal propensity to consume increases then aggregate demand will increase leading to inflation, if government spending increases then this will increase aggregate demand also if the level of investment increases this will cause an increase in the aggregate demand and finally if the exports increase then aggregate demand increases and this can be seen when there is a boom caused by increased exports. The monetary sector means that in the case where the money supply in an economy increases this triggers inflation.
The other type of inflation is the cost push inflation caused by an increase in the cost of production due to an increase in the price levels of Raw materials. an increase in the cost of production will lead to high unit cost of production, these high prices are passed on to the consumers, therefore their real wages decreases and trade unions come in and fight for high wages and if they are granted higher wages the cost of production further increases.

In case of inflation the government will come in and interfere with the economy, in this case the government will simply use monetary policies to improve the situation, they will increase the rate of interests so that the amount of money in circulation in the economy reduces, the government will also improve this by reducing the supply of money in the economy, this can be achieved through increasing the bank reserve ratio held by a central bank.
This can be diagrammatically shown as follows;




When inflation increases from 0 to 1 then the real GDP falls from y0 to y1, if y0 was the potential output then the economy is operating below potential output, to improve this government will reduce the interest rates the interest rates ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Government Economic Policy Essay Example | Topics and Well Written Essays - 3000 words”, n.d.)
Government Economic Policy Essay Example | Topics and Well Written Essays - 3000 words. Retrieved from https://studentshare.org/politics/1506608-government-economic-policy
(Government Economic Policy Essay Example | Topics and Well Written Essays - 3000 Words)
Government Economic Policy Essay Example | Topics and Well Written Essays - 3000 Words. https://studentshare.org/politics/1506608-government-economic-policy.
“Government Economic Policy Essay Example | Topics and Well Written Essays - 3000 Words”, n.d. https://studentshare.org/politics/1506608-government-economic-policy.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Government Inefficiency and Policy Implications of Economic Research
It is also an inherent power of the state in which everyone provided by the law should and must conform in it. The internal Revenue Code Sections 861-864 determine the source of income and Sections 861(a) and 862(a) specifically allocate certain items of gross income to sources within or without the United States.
5 Pages(1250 words)Essay
Government economic policy
Governments all over the world have targeted goals they want to achieve. I order to achieve their objectives they carry out economic policy. That policies of governments can be referred to as macroeconomic policy while the policies of smaller entities are called microeconomic policies. Both these sets of policies affect each other significantly.
8 Pages(2000 words)Essay
Focus on a review of aphasia
Some of those who experience aphasia are predominantly affected in the expressive language (what is said) whilst others are predominantly affected in their receptive language (what is understood), other people who experience aphasia have both expressive and receptive language dysfunction. In general, language disability occurs in the form of talking and understanding and also in reading and writing.
6 Pages(1500 words)Essay
Government policy - case study
In the case of Country A, insensitivity to family dietary habits, cultural perspectives, work habits, and role of women in the rural household creates a situation where land use remains stagnant and families are forced to split up in order to fight to hold onto productive arable land, and where women struggle to hold onto the one area of social power they are allowed in their patriarchal society, corn production.
2 Pages(500 words)Essay
Economic Policy
There are also policies that increase the economic welfare that applies locally and from wider perspectives. The government has the authority over the political units and ruling power in the society. The government has the functions to make laws, to adjudicate and to influence all the administrative decisions.
6 Pages(1500 words)Essay
Evaluate the different economic explanations of the current level of unemployment in the UK, discuss the economic and social costs and consider the policy measures available to the government to tackle the problem
A worsening unemployment rate in the United Kingdom is likely one of the effects should a global economic crisis erupt a few months or years down the road. In measuring unemployment, the United Kingdom Office for National Statistics (UK-ONS 2009, p. 7) gives emphasis on the
6 Pages(1500 words)Essay
Economics - Economic Policy - Discuss and critically evaluate the rescue and stimulation packages by the UK Government since the start of the credit crunch in 2007
The government intervention is sought when the situation has gone out of control, and there is a call for protection from the government using public money. The ideological conflicts which had been
10 Pages(2500 words)Essay
Government policy in respect of FOOD EXPORTS, as expressed and implemented through Customs law and procedure, serves to encourage and support the achievement of economic growth while enhancing the general human development and wellbeing of the Jamaican pe
According to the Banana Board Act, no person other than the Board shall export or attempt to export any bananas: Provided, however, that the Board may grant permission in writing to any person to export specified quantities
3 Pages(750 words)Essay
Government Fiscal Policy
The stimulus package was a fiscal policy strategy that was used to jumpstart the economy. This package included bank bailouts, tax rebate checks, and other stopgap measures to stop the slowdown in the economy. The cost of this controversial package
1 Pages(250 words)Essay
The Role of Government in Economic Recession, Fiscal Policy
In this quarter the level of GDP declined as a result of the decline in customer spending by 1%, this decline was as a result of the high levels of unemployment in the economy. (Alan Rapperport (2009)) The current recession is considered the longest since 1947 and due to increased government spending the budget deficits this year is expected to reach $1,600 billion.
4 Pages(1000 words)Essay
sponsored ads
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.
Let us find you another Essay on topic Government Economic Policy for FREE!
logo footer
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • StudentShare App Store
  • StudentShare Google play
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • Miscellaneous
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us