B. the stimulation of incentives to work, save, invest, and undertake entrepreneurial risk. C. the stimulation of consumption spending by households. D. the need for expansionary fiscal policy. E. the need for increased governmental involvement in the economy. 2.
When the demand for U.S. dollars increases, the value of the dollar will increase or appreciate (Stone 2008, pp. 685). As a result, U.S. products become more expensive for foriegners causing a reduction in exports and increasing imports. This not only effects the U.S. economy, but also affects the economies in other countries. Monetary policies influence and are influenced by international developments, including exchange rates, and based on these market conditions the U.S. government can make strategic changes to these policies to maintain the country’s economic stability (full employment, stable growth and price stability).
Evaluating Fiscal Policy Alternatives Simulation ECO 372 November 28, 2011 Matthew Angner A government has a couple of roles the need to enforce in order to ensure that their people and land will be able to support them through any times. One of these roles is to invoke and sustain economic growth. The government can achieve this by trying to manipulate the trends in that particular economy, though fiscal policy. Fiscal policy is changes that are made to government spending or taxes that leads to one of two conclusions. One of these conclusions is that the economy will stimulate because of the changes being made, or the economy will slow down.
7. Some argue that aid is focused on industrialization causing a greater gap in incomes and living standards between those in that sector and those in the traditional agricultural sector. 8. Aid is often available only if the country agrees to adopt certain economic policies and these often reflect the Washington Consensus policies that emphasize free market principles of liberalization, deregulation and privatization to promote economic growth. These policies might be more in the interest of MNCs and the developed countries rather than the developing countries.
If the interest rate is low, it will cause more funds to be available, greater expansion and increased employment. If the interest rate is high, it will cause fewer funds to be available, less expansion, and decreased employment. Fiscal policy is an important tool for managing the economy because of its ability to affect the total amount of output produced or the gross domestic product. The first impact of a fiscal expansion is to raise the demand for goods and services. This greater demand leads to increases in both output and prices.
One thing we can be sure of is that a business cycle affects different sectors of our community in different ways. Gross domestic product is a great measure of an economies growth. The chair of the Federal Reserve uses information gathered from GDP to assist with making necessary adjustments to keep a balance between inflation and unemployment.
(Kelly, M. and McGowan, J., 2012)(p.19 & 21). Fiscal policy is more effective in promoting economic growth, by increasing government spending or reducing taxes. Fiscal policy in economic has reflected both political and economic realities. Monetary policy has the ability to slow down the economy in order to promote full employment and inflation. The monetary policy to economic is to increase the amount of money, by cutting interest rates.
Satoria Mckenzy Principals of Economics (Ref # 380267) Spring 2013 The Full Economic Impact of an Increase in the Minimum Wage Where minimum began - The history of minimum wage, what is minimum wage, the laws of minimum wage. The minimum wage has a strong social appeal, rooted in concern about the ability of markets to provide income equity for the least able members of the work force. For some people, the obvious solution to this concern is to redefine the wage structure politically to achieve a socially preferable distribution of income. Thus, minimum wage laws have usually been judged against the criterion of reducing poverty. Statutory minimum wages were also proposed as a way to control the proliferation of manufacturing industries.
As situations happen around the world the internal economy is being affected, the price of oil increases and more money in the market should be created, but this will affect the inflation, as more money is in the market, the GDP keep growing and the unemployment is decreasing. To balance the economic growth, lower the inflation, and make a reasonable rate of unemployment it is important to take in consideration that typically if money is released into the system the real Gross Domestic Product will increase, creating opportunities of work and decreasing the unemployment rate. After indentifying the tools used for the Federal Reserve and analyzing the influence this has with the money supply the Feds can add or take money into the system to control the levels of inflation, increase the Gross Domestic Product and reduce the
The argument or what Hobson called “the economic taproot of imperialism” was excessive capital in search of investment, and that this excessive capital came from over saving made possible by the unequal distribution of wealth. (The New Imperialism/The Latin Library, Thompson) The remedy, he maintained, was internal social reform and a more equal distribution of wealth. (New Imperialism Lecture Notes, J. Hollis & Western Heritage, pg 828). Meanwhile, Lenin and other Marxists believed imperialism resulted in the demise of capitalism. As wealth concentrates in fewer hands, the ability for investment at home is reduced resulting in foreign investments and exploit weaker nations.