To increase their taxes would be appropriate and this would be stream lining taxes at a time when the economy needs a boost. The Keynesian economists would look at government spending as a means for the government to stop the little growth the economy has had and is to have. The government spending would make it so the people would not have the money to spend within the states and they would have to go without needs and desires. This in turn would be the money that could be used within the economy.
As the capital is put back into the economy the demand for supplies will go up. As the demand rises the amount of supplies will also rise increasing the need for employees and in turn putting more available spending capital in the hands of the buyers. By increasing government spending there is more money being put back into the pockets of the people. This return in turn frees up capital citizens are able to put back into goods and services increasing demand. Lowering taxes can also leave money in citizen’s pockets but it also takes away from the amount of money the government is able to use to stimulate the economy by spending.
Trident University Macro-Economic Indicators: GDP, CPI, Unemployment, Interest Rates TAWANNA J. RICHARD ECO202 MODULE 2 Cases Dr. Canarella GDP 1. Y= C+ I+ E+ G 1750= 1,000+ 200+ 300+ 250 2. If we increase our domestic energy production, and imported less oil from foreign countries the GDP would raise extremely high due to no out sources. Inflation 1. ((111-106)/106)*111 111-106=5 5/106= 0.0471 0.0471*111= 5% 2.
The Sarbanes-Oxley is the act of 2002. This act consist of originals names of the Investors Confident Act, Public Company Accounting Reform, Corporate Accountability Act, Investors Protection Act of 2002, and many more. The main purpose of these Acts is to focus on legislation. This Act is to support the public with support, and to maintain at a high level of confidence in the financial reports of public companies. SOX were introduced to be known with its purpose.
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.
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.
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). For example if Federal Reserve actions raised U.S. interest rates, the foreign exchange value of the dollar generally would rise. An increase in the foreign exchange value of the dollar, in turn, would raise the price in foreign currency of U.S. goods traded on world markets and lower the dollar price of goods imported into the United States (Federal Reserve, 2005). By restraining exports and boosting imports, these developments could lower output and price levels in the U.S. economy and control or lower
Monetary policy is the use of interest rates to manipulate the level of aggregate demand in the economy and loose (expansionary) monetary policy is a reduction in the interest rates. This will result in an injection of extra consumption because it is cheaper to borrow money on credit cards and therefore allowing consumers to spend more which will cause an increase in aggregate demand (AD). Additionally, extra consumption will allow shops to gain more profit preventing “business failures.” Furthermore, mortgages will be cheaper and therefore consumers feel richer and there will an extra injection of consumption. AD will also increase due to an increase in investment, causing an increase in aggregate demand from AD1 to AD2 as shown below. However,
The theory behind this was that if taxes were increased or left at their same rate, the amount of money brought into the government would be x. But if taxes are cut, GDP rises. The rise in GDP plus the lower taxes would be greater than x, causing an increase in tax revenues. This would push the supply curve to the right also increasing real Gross
First, if the government increases its purchases but keeps taxes constant, it increases demand directly. Second, if the government cuts taxes or increases transfer payments, households’ disposable income rises, and they will spend more on consumption. This rise in consumption will in turn raise aggregate demand” (Weil, 2008, para. 4). Consumer income has a huge effect on aggregate supply and demand just as the aggregate supply and demand can affect consumer income.