...Economic policy is the government attempting to stabilize the economy for the good of all people. Ways in which the government attempts to reach their goals is by being in charge of setting the right levels of taxation, government budgets, money supply and interest rates in the economy. All of these actions that the government takes influence the economy in some way. “Some types of economic policy actions can include setting interest rates through a federal reserve, regulating the level of government expenditures, creating private property rights and setting tax rates” (economic policy). Economic policy has many goals. Economic growth is one goal. If incomes of consumers and businesses are increasing over time then economic policy is working well for the economy and its people. Full employment is another goal. This goal for economic policy is to ensure that every member of the labor force who wants to work will find work. The last goal to mention is price stability. The goal of price stability is to stop both deflation and inflation from occurring. If inflation is set too high then prices of goods in the economy will be too high and not sold as much because consumers will not be able to afford them. “In an effort to eliminate uncertainty, the Fed has set a target rate of a steady 2% inflation rate” (McMahon). The Federal Government has an involved role in maintaining America's economy; they need to find the right balance working with numbers and economic expertise. When...
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...can u name? Lack of capital, physical capital(buildings, machines etc.), human capital and entrepreneurship 2. What causes of richness can u name? Over-population, poor nations-lack of natural resources, prosperity requires liberty 3. Name 2 kinds of economic planning Mandatory – setting quotas and mandatories for goods Indicative – encouraging production of some branch by subsides, grants and taxes 4. Name at least 3 economic systems Socialism (planned and collective), capitalism (individualistic and competetive), mixed (planned and individualistic – war capitalism, collective and planed – market socialism eg. China) 5. Name basic institutions of effective capitalism Provate property rights, market system, no corruption, monetary stability, openess of economy 6. Name basic recommendations or elements of merchantilism Encouraging agriculture, ecenomic wealth can be measured by precious metal (silver/gold); export over import, merchant fleet as vital importance, government involved in economy 7. Key elements of national competetiveness Basic institutions, infrastructure, stability 8. Name main elements of firm competetiveness Demand and supply, financal performance, investment ratio 9. When Keynesian policies to fight recession can not be applied? When there is a budget deficyt, high public debt, recession, no possibility to borrow money 10. How many arguments in favour of protection of infant industries can u name? Further development of this industry, reduction...
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...The World Bank notes PREM AUGUST 2009 N U M B E R 141 ECONOMIC POLICY The Global Financial Crisis: Comparisons with the Great Depression and Scenarios for Recovery Milan Brahmbhatt (PRMVP) and Luiz Pereira Da Silva (DECVP) A recent paper by Eichengreen and O’Rourke on “A Tale of Two Depressions” (publicized by Martin Wolf in the Financial Times) has highlighted some close correspondences between economic performance during the present world recession and that during the early months of the Great Depression that began in late 1929.1 World industrial production from April 2008 to April 2009 fell as rapidly as during the first year of the Great Depression, while stock market prices and world trade volumes have fallen more rapidly than in the comparable period. These comparisons lead Eichengreen and O’Rourke to draw the alarming conclusion that “[I]t’s a Depression alright.” They note, however, that fiscal and monetary policies are likely to be much more supportive of economic activity in the next 1–2 years than they were during the first few years of the Great Depression. The first part of this note outlines some other important structural differences between the world economy today and in the 1930s that are likely to affect how the present recession plays out relative to the Great Depression. The second part of the note discusses possible recovery paths out of the current crisis. 1. Comparing the Great Depression with the Present Global Financial Crisis Larger...
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...Economic policy is the basis for all public policy within the United States. Any function of the government relies upon funding, from day-to-day operations to foreign relations to social programs. To continue to function successfully, economic policy must show growth, keep prices stable, have a positive balance of trade, manage deficits and debt, and strive for full employment. A major component of America’s free-market, capitalist economy is the role of corporations. Corporations contribute to economic growth, participate in trade, and provide employment for the government, which in turn provides tax revenue. In order to continue to grow the economy, and provide services for the populace, corporations need to be profitable. Many corporations, however, have been merging with overseas companies to avoid the US tax rate. Because economic policy is so intertwined in all aspects of public policy, this practice of moving revenue out of the country can have long-reaching implications. Recently, President Obama criticized these corporations, calling into question their “economic patriotism,” and making it clear that tax evasion might be profitable for a company in the short-term, but a threat to our nation’s stability in the long-term (Cohen). Although businesses have a tax rate of 35%, write-offs for equipment, expenses, and even advertising, whittle away at the amount of taxes corporations actually pay. Even with the many available tax loopholes, many corporations are still unhappy...
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...EC3010 - Economic Policy Assignment 1 The nature of the ongoing financial crisis merely confirms what Economists have known for some time, namely, that the interconnectedness of global economic activity renders macro-management by single governments redundant. Their function is now to regulate markets to ensure economically efficient solutions. Module Leader :Paul McKeown Student Name: Chen JiaHui Student number: G20555142 1.0 Introduction This report argues that the ongoing financial crisis merely confirms the global political consideration what economists have known for some time. Firstly, it briefly explains how the financial crisis spread around the world in such a short time by globalisation. This report points out that the global financial system is inherently flawed, showing how economies go from stability to instability. Subsequently, it focuses on the link between economic globalisation and macro-management by single government, considering whether Macro-management of a country’s economy is redundant, given the global interconnectedness economy’s activity and business. This report shows government policy has reduced the effectiveness of interconnected economies, such as fiscal policy and monetary policy. After that, it emphasizes that it is imperative for governments to regulate financial markets so as to ensure economically efficient solutions. Consequently, this report concludes that although macro-management by single government is less effective...
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...Economic policy refers to the actions that governments take in the economic field. It covers the systems for setting interest rates and government budget as well as the labor market, national ownership, and many other areas of government interventions into the economy. Nature of Economic Policy The ideal economic policy, both for today and tomorrow, is very simple. Government should protect and defend against domestic and foreign aggression the lives and property of the persons under its jurisdiction, settle disputes that arise, and leave the people otherwise free to pursue their various goals and ends in life. This is a radical idea in our interventionist age. Governments today are often asked to lower the prices of others, to fix wages, to help some businesses get started and to keep others from failing, to encourage or hamper imports and exports, to take care for the sick and elderly, to support the profligate, and so on. Ideally government should be a sort of caretaker, not of the people themselves, but of the conditions which will allow individuals, producers, traders, workers, entrepreneurs, savers, and consumers to pursue their own goals in peace. If government does that, and no more, the people will be able to provide for themselves much better that the government possibly could. Concepts of Economic Policy: * Economic policy seeks to achieve objectives such a high rate of growth, a low and stable rate of inflation and high levels of employment * Government...
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...Expansionary Economic Policy Clinton Dullin Eco203: Principles of Macroeconomics Evelyn Carlson 9/1/02014 The government in times of economic recession has responsibility to take action, engaging in expansionary economic policies is the action my paper will discuss. The types of economic expansion include Fiscal Policy, and Monetary Policy, the expansion of the two policies allows the government to adjust taxes, and government spending. Harry Truman once quoted “It’s a recession when your neighbor loses his job: it’s a depression when you lose yours.” (The economy perspective, the banker's banker. (1998, Jul 29). When recession hits the first party that is blamed is the government, so there ability to take action is a sign of them taking responsibility. Government action is necessary to right the recession ship, expanding Fiscal, and Monetary Policy may very well be the answer. The first topic of discussion is Expansionary Fiscal Policy and how the government uses the policy to affect the economy. Expansionary Fiscal Policy is a type of policy which includes increase in government purchases, a supple decline in taxes, while making an increase in transfer payments. These changes are designed to close the recessionary gap, while increasing economic stimulus packages and they aim to decrease unemployment. The government will introduce Expansionary Fiscal Policy during anticipation of contractions in the business-cycle. Increase in government spending will increase...
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...Expansionary Economic Policy Laura Jackson Eco 203 Nicholas Bergan April 7, 2014 Expansionary Economic Policy Recent economic events have led to a need for the American people to call on their government to utilize their legislative power by implementing expansionary economic policies in an effort to stabilize the fluctuating economy. More specifically, the government has used expansionary fiscal and monetary policies to do so. Such fiscal policies used affected the taxes and government sending both positively and negatively as well as aggregate demand, GDP, and employment, while the monetary policies applied have adjusted the required reserve ratio and discount rates and have resulted in the purchasing and selling of government securities. In a developed country such as ours, fiscal policy is an important tool used to steady the economy. In terms of using this tool as an aid to expansion, necessary adjustments in taxes and government spending are required, resulting in changes in aggregate demand, GDP, and employment. “Fiscal policy is an important tool for managing the economy by having the ability to affect the total amount of output produced,” aggregate demand, and employment (Buena-Bontas & Petre , 2009). How is this done? These changes are made through adjustments in taxes and government spending. In most cases adjustments in tax rates and government spending work concurrently. During a time of high deficit and debt, it is in the government’s best fiscal...
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...Economic and Monetary Policy Auditing and Business Concepts Submitted by: Edmore H. Delaney Perspective of the Economic and Monetary Policy Framework of the Republic of Liberia This paper is intended to capture the framework of the economy and monetary policy of the Republic of Liberia and the effectiveness it pursues in the implementation its institutional framework. The economy continues to be plagued by a multiplicity of social, financial and economic challenges which has seen production level of the sector far below prewar levels (Findlay & O’Rourke, 2007). Consequently, the government’s approach has been directed towards vigorous pursuing money and credit supply to stabilize the economy. In order for Liberia to implement a sound economic and monetary policy, the government needs to ensure that a monetary aggregate is achievable. The Central Bank of Liberia in 2005, initiated a program to ensure stability of money demand functions where interest rate and income will significantly have impact on the money demand function (Matthew, 2009). The real gross domestic product (GDP) growth in 2014, which was initially projected at 5.8%, is estimated to decline to 2.5% or less by the end of the year. According to the Ministry of Finance and Economic Planning due to the absence of EVD, growth projections in 2014 reflected a weaker economic outturn as compared to the previous year (2013). This growth was driven largely by the expansion...
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...Jake Cowley L6 IB History Assess the successes and failures of Stalin’s Economic Policy After Stalin had become the sole leader of the Soviet Union in 1929, he saw the need to introduce two new major economic policies, collectivization, and a series of five year plans. Both of these new economic plans were designed to boost Russia’s agriculture and industrialization within a short period of time, to catch up with the world leading powers, which were essentially Britain and the United States at the time. Stalin strongly believed that it was necessary to go to any lengths, which would soon include killing off thousands of peasants, to reverse the backwards economy of the time, to eventually overtake that of other countries. As the economy of Russia at the time, was in quite a terrible state. He believed he could do this by heavily focusing on agriculture and industry, to prepare Russia for a new age. Stalin’s new economic policies would soon prove to be a mix of successes and failures for both the economy and the people of Russia, each to different extents. Stalin’s first economic policy of the 1930’s was collectivization. This was the joining of private plots which had been previously divided amongst the peasants by the Tsar, in order to increase the amount of output production altogether. Although this might have seemed like a good idea to Stalin at the time, this economic policy proved to have more failures than successes. The collectivization of grain meant that...
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...is going to sustain or fail. Economic growth plays a pivoted role in improving nation’s gross happiness and ameliorating the lifestyle of its people. Economic growth is defined as “The value of all the products manufactured and sold in a country of the course of one year along with everything that people do and get paid for, all that amounts to the economic growth.” (Sandford and Bradbury, 1970). When people earn more money and then buy more products and services the economy grows. Politicians also want to see the economy grow, that’s why they work towards achieving greater employment, state prices and a balance between imported and exported goods. More growth means more money. The economic growth should be achieved in a way that it must reach to the point where the economy has finally matured. The resources that industries require are limited and the need for raw materials often doesn’t take nature into account. That is why rapid or poorly planned economic growth starts to have bad impact on quality of life, that’s why countries like Germany, Bhutan etc. plan their economic policy keeping in mind about nature’s safety and gross domestic happiness (Rodrik, 1996). 2. Economic Policy An economic policy is a very complicated area but it can be categorized into following major areas 1) Fiscal Policy: which refers to government’s budget. In other words, it deals with the revenue or the spending in the form of taxes etc. 2) Monetary Policy: which refers to getting interest...
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...Economic and Monetary Policy Brenda Roper Dr. Jones Olajide Auditing and Business Concepts February 21, 2016 Economic and Monetary Policy: Sweden and the USA The monetary and economic policies of a country influence its economic growth through internal and external investment. Reforms in these policies have been the norm of many countries globally with the aim of attracting investors in the highly globalized international community (Alexander & Thomas, 2013). As transport and technology continues to increase opportunities to trade with multiple countries, it is becoming necessary for countries to attract as many external investors as possible to bring new advantages that can boost the economy. This paper will attempt to review the economic and monetary policies of the United States and Sweden. These countries were among the best ten economies in the world in 2013 and continue to strive to retain the top positions among the world economies. Question One Sweden has over the recent years emerged as the model economy in the world through its commitment to reforms that increase its efficiency in economic development. Although the country fell from the third position in 2011 to position six in 2013 in terms of competitiveness index (Scott, 2015), it has continued to retain its position in technological readiness. Compared to other nations in terms of incorporation of existing technologies in all forms of economic activities, Swedish companies are far ahead of others...
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...Public Policy in Economics During week four Team C discussed the effects of externalities on market outcomes. The team reviewed different types of mergers - horizontal, vertical, and conglomerate mergers. The team also analyzed the effect of government interventions, taxation, and regulations on economic behavior. Effect of externalities on market outcomes When discussing the effect of market externalities, we are discussing how an organizations activity evolving around production or consumption may affect the well-being of personnel not involved. The term "externality" is derived from the reality that something or someone external of the action or transaction becomes affected by the production of consumption of the good. An externality can be negative if an organization generates costs, such as harm or distress for uninvolved people. Some examples of negative externalities are pollutants from tobacco smoking (second- hand smoke) and industrial facilities have a negative effect on the health and well-being of others. Smoking in restaurants has caused alarm such that smoking is banned from many eating establishments. A beneficial activity to uninvolved personnel is known as a positive externality. Professional sports, or sports in general tend to play an important role model for young athletes. Celebrity athletes influence young children to train hard, compete well, and strive to be the next superstar. Unforeseen, and third party influence, are the keywords;...
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...RONALD REAGAN ECONOMIC POLICIES Name: Instructor: Ronald Reagan Economic Policies Reaganomics was the popular term that was used to describe Ronald Reagan’s economic policies, which advocated for a decreased social spending, widespread tax cuts, increased military spending, and deregulation of the domestic markets. This paper aims at analyzing the economic policy of President Reagan’s administration. Generally, Reagan pledged to advance, or return, to a free market and that involved getting the government off the citizens’ backs. Specifically, he was in favor for a massive deduction in government spending, a balanced budget by the year 1984, and a more drastic cut in taxation. His main concern was the reduction of income tax, and ensuring a come back to the gold standards, when money supply was done by the markets and not the government. Besides calling for free markets domestically, Reagan asserted deep commitment to liberty of international trade. However, when the president’s advisors went to office with the idea of cutting both taxes and spending, they found out that the first objective was easier to achieve than the second because of politics of the day. Cutting tax was popular and they did come down substantially. The top marginal rate reduced to 28 per cent from 70 per cent (Magazzino, 2010). Many loop holes were eliminated and the tax base broadened. However, cutting the spending was unpopular and the democratic...
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...The economic benefits of environmental policy A project under the Framework contract for economic analysis ENV.G.1/FRA/2006/0073 - 2nd FINAL REPORT November 2009 Matt Raymenta, Elke Pirgmaierb, Griet De Ceusterc, Friedrich Hinterbergerb, Onno Kuikd, Henry Leveson Gowera, Christine Polzinb, Adarsh Varmaa a b c d GHK Sustainable Europe Research Institute (SERI) Transport & Mobility Leuven VU University Amsterdam, Institute for Environmental Studies (IVM) Institute for Environmental Studies Vrije Universiteit De Boelelaan 1087 1081 HV AMSTERDAM The Netherlands Tel. ++31-20-5989 555 Fax. ++31-20-5989 553 E-mail: info@ivm.falw.vu.nl Internet: http://www.vu.nl/ivm vrije Universiteit amsterdam Contents Executive Summary 1. 2. 3. 3.1 3.2 3.3 3.4 3.5 3.6 4. 4.1 4.2 4.3 4.4 4.5 4.6 5. 5.1 5.2 5.3 5.4 5.5 5.6 6. 6.1 6.2 6.3 6.4 6.5 6.6 7. 7.1 7.2 7.3 7.4 7.5 8. 8.1 Introduction Environmental Policy and the Economy Environmental Policies and Productivity Description and background Policy instruments Review of evidence from the wider literature Evidence from examples and case studies Scale of economic benefits to date and assessment of the further potential Beneficiaries and timescale Environmental Policies and Innovation Description and background Policy instruments Review of evidence Examples and case studies Scale of economic benefits Beneficiaries and timescale Environmental Policies and Employment Description and background Policy instruments Review of evidence from...
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