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For Saturday Monday at 11.00 am. Fiscal policy refers to the

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For Saturday Monday at 11.00 am.
Fiscal policy refers to the changes in government’s choices regarding the overall level of government spending and taxes to affect the behavior of the economy. Fiscal policy can expand or contract aggregate demand. The government sometimes uses the fiscal policy instruments in an attempt to stabilize the economy. Under a recession, an expansionary fiscal policy is adopted, which involves lowering taxes and increasing government spending. In an overheated expansion with an inflationary pressure, a contractionary fiscal policy is utilized, which requires higher taxes and reduced spending. Economists and policymakers disagree about how active the government should be in these efforts.

1.What are the expansionary and contractionary fiscal policies? What are their policy instruments? How are they used to deal with the inflationary gap and recessionary gap?

2.What is the relationship between budget deficits and national (public) debt? Why has the USA national debt been increasing for decades?

3.Should the tax laws be reformed to encourage saving? Do you think consumption tax is better than income tax?
Submitted: 9 months ago.
Category: Essays
Expert:  Alex replied 9 months ago.
Hi. Thanks for requesting me. I can handle this for you. What's the required word count?

Thanks
Alex
Customer: replied 9 months ago.


It is a paragraph per each question

Expert:  Alex replied 9 months ago.
No problem. Will take care of it.
Expert:  Alex replied 9 months ago.

Hi Ruth. Interesting questions - probably a little longer answer than you needed :) The answer is 100% original.

 

http://ge.tt/5wOI1Lu/v/0?c

FiscalPolicy.docx

 

Thanks again for requesting me and let me know when you need assistance in the future. Great to work with you again.

 

Alex

Customer: replied 9 months ago.


Sorry Alex, I can no enter at that link. Please sent me the answer through here.


 


Thanks

Expert:  Alex replied 9 months ago.
Sorry about that. Here you are:

​Based on the current macroeconomic environment the federal government can take measures to either slow or spur economic expansion. There are a number of fiscal policies designed to reach these ends. First, the government has the ability through the Federal Reserve to print money and as such can control the amount of money in supply. As the amount of money in the money supply increases consumers and businesses have access to more money and typically at lower interest rates which is designed to stimulate the economy by pushing more money through it which actually generates more revenue and more taxes as it iterates through the economy. The other primary method is by controlling the interest rate which is also done by the Federal Reserve which determines the standard borrowing rate that banks charge each other on loans which will impact the price of everything from mortgages to car loans as well as interest on investments such as CDs. By increasing the federal funds rate the economy slows as people and businesses are less likely to borrow. These fiscal policies along with the amount of government spending and taxes directly relate to inflationary and recessionary gap as they seek to help reach the equilibrium of those gaps in order to provide a more stable economic environment that prevents cyclical occurrences. Such events occur when the employment rate supersedes the amount of workers available or a recessionary gap can exist when there are more unemployed causing the gap to widen as employers can lower wages due to an abundance of labor.

​The national debt is a culmination of the budget overages accumulated over the years as the government typically spends more revenue than it receives. This has been the case for decades as policy makers have agreed to pass budgets that aren’t balanced and have no problem borrowing additional money from foreign countries to provide services that must be paid for in the future that includes interest expense. Most of these are held as treasury securities and primarily by China. As the budget deficits occur the national debt increases and until Congress ensures that the budget is balanced it will continue to increase. Increases in wages and the overall ability of the government to borrow money has allowed these deficits to continue to occur year after year. Until at such point people demand a balanced budget the Congress will likely continue to spend money thereby further increasing the national debt to a point at which it may default.

​Tax laws should absolutely be reformed to encourage saving. Providing individuals with the ability to save money provides them with the opportunity to invest that money instead of having it redistributed which simply results in everyone being stuck at the same level on the socioeconomic ladder with little ability to take on additional risk and make investments that would yield further job growth. As taxes remain high on income there is little reason to attempt to make more money as it simply results in paying higher taxes and taking home less of what one earns. A consumption tax would be better than an income tax as it would apply equally to everyone and wouldn’t place the largest burden on those who make the most income. A consumption tax is much more fair approach which allows people to save or to spend and only be taxed when they spend. This also encourages individuals to make more money and invest more such that they can earn more.
Alex, Bachelor's Degree
Category: Essays
Satisfied Customers: 2587
Experience: BS in Business Administration with honors. Able to assist in various business related questions.
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