This website uses cookies to ensure you have the best experience. Learn more

Fiscal Policy Essay

733 words - 3 pages

Fiscal Policy can be explained in many ways, for example. Fiscal policy is the use of the government budget to affect an economy. When the government decides on the taxes that it collects, the transfer payments it gives out, or the goods and services that it purchases, it is engaging in fiscal policy. The primary economic impact of any change in the government budget is felt by particular groups—a tax cut for families with children, for example, raises the disposable income of such families. Discussions of fiscal policy, however, usually focus on the effect of changes in the government budget on the overall economy—on such macroeconomic variables as GNP and unemployment and inflation.

     Fiscal Policy also can be explained as the economic term which describes the behavior of governments in raising money to fund current spending and investment for collective social purposes and for transfer payments to citizens and residents of the territory for which the government is responsible. The money may be raised by taxation, by borrowing, by user charges on social assets or services, or by fiat. Fiscal policy can include deficit spending to stimulate demand for domestic goods and services to help unemployment or make efforts to cut deficits or raise the budget surplus to fight inflation.
     There are many different types of Fiscal Policy. It all depends on the given situations the government is in. A government may adopt certain policies that can either increase or decrease output in the short run. For instance, if the government faces a threat of recession, it may adopt an expansionary fiscal policy. This policy involves increasing government spending and cutting taxes, in order to spur economic output. But if the government decides they need to do the opposite the government may adopt concretionary fiscal policy. This involves a reduction in government spending and an increase in taxes when faced with an overheating economy. But these actions, may have other effects in the economy. For instance, and expansionary fiscal policy may lead to the crowding out of investment.
     Like every other government controlled organization there is a group of people who are control of Fiscal Policy. There is a Council of Economics. These men are called Council of Economic Advisors. In the Council of Advisors there are three people. There is a Chairmen and two members. Even...

Find Another Essay On Fiscal Policy

Fiscal Policy Essay

1303 words - 6 pages nation. The United States employs the fiscal policy to monitor and make deliberate changes to escalate or slow down the country’s economy. The fiscal policy process occurs via changing government expenditures and taxes that have a direct impact on the nation’s Gross Domestic Product (GDP). Tax Payers Debt, deficits, and surpluses related to the government budget have a direct impact on tax payers in the U.S. Payment for the national debt comes

Fiscal policy Essay

847 words - 3 pages From the second quarter of 2008, the local economy was going down due to getting the impact from the global recession. To deal with the situation, the State Bank of Vietnam (SBV) has issue series of monetary policies to control and adjust critical ratio and stimulate the economy.1.The massive policy stimulus has been to support growth as inflation took a back seat. After many decisions issued, SBV has slashed base rates to 7%, lending rates cap

Monetary Policy vs. Fiscal Policy

1991 words - 8 pages Monetary Policy vs. Fiscal PolicyPeople always struggled with an idea of prosperity and success, whether it was a personal goal or whether it was something major - like wealth of a country. Nowadays, we are studying a science, which is really significant and valuable - Economics. Economics is a tool for achieving those goals, knowledge that people can use and imply in real life, and at the present time probably undividable part of governments

Fiscal Policy Simulation

633 words - 3 pages The Fiscal Policy simulation provides a background for implementation of key concepts for economics and the dilemmas of a government. Several questions are proposed such as, "Why is a high budget deficit cause for concern? Is it better to have a budget surplus? What can the government do to fight inflation? How does an economy come out of a recession?" These questions are the everyday affairs for the government of the country of Erehwon. The

Fiscal Policy Simulation

875 words - 4 pages Fiscal Policy SimulationWhat are the effects of the changes in fiscal policy in the simulation?The formula of fiscal policy affects the popularity of a presidency, the unemployment, the gross domestic product (GDP), the government tax revenue basis, education expenditures; however, a major example of the effects of the changes in policy cannot be reaped immediately. A recession may take time to resolve the intent of controlling inflation

Monetary and Fiscal Policy

1413 words - 6 pages Monetary and fiscal policy and their applications to the third world countries with a huge informal sector This essay seeks to explain what are monetary and fiscal policy and their roles and contribution to the economy. This includes the role of the government in regulating the economical performance of a country. It also explains the different features and tools of monetary and fiscal policy and their performance when applied to the third

Fiscal Policy Simulation

888 words - 4 pages The Fiscal Policy Simulation assignment explains the effects of changes in fiscal policy, identify four key points presented in the simulation, apply the lessons to the workplace and describes the growing further results. The simulation covers fiscal policy the impact of a change in government spending or taxation on the real Gross Domestic Product (GDP) and aggregate income of the economy.In my first decision of the simulation, the Director of

Fiscal Policy Simulation - 995 words

995 words - 4 pages Aside from creating and enforcing regulations and laws the government has an important part in encouraging and fostering economic growth. One of the ways that government can manipulate the trends in the economy is called a fiscal policy. A fiscal policy according to Colander is an intentional change made to governmental spending or taxes that leads to either stimulation or a slow down in the economy (2004). The contents of this paper will show

Fiscal Policy Simulation - 1052 words

1052 words - 4 pages "Fiscal policy is the use of the government budget to affect an economy" (Weil 2002, para. 1). Fiscal policy is measured by observing the difference between what the government's intake and the government's output. When the government's revenue is higher than the expenditure, the policy is said to be tight. On the other hand when the government's revenue is lower than the expenditure the fiscal policy is said to be loose (Weil, 2002).The fiscal

Fiscal Policy Alternatives Simulation

1091 words - 4 pages Fiscal Policy Alternatives PAGE \* MERGEFORMAT 3 Running head: FISCAL POLICY ALTERNATIVESFiscal Policy AlternativesEden JackUniversity of PhoenixFiscal Policy AlternativesThe country of Erehwon has a population of 30 million and a total land area of 440,500 square kilometers (University of Phoenix). As newly elected President, I will be making some fiscal changes in the hopes of improving our economy. Our country is currently facing the issues

Fiscal Policy Alternatives

818 words - 3 pages AbstractIn Economics 360 at the University of Phoenix I took part in a simulation to demonstrate fiscal policy. During this simulation I discovered several topics relating to what I was learning in the text. I will be discussing the effects of the changes in fiscal policy, several key points, how it relates to the workplace and my results from the growing further section.Fiscal Policy AlternativesThe governments of countries evaluate and work

Similar Essays

Fiscal Policy Essay

995 words - 4 pages Aside from creating and enforcing regulations and laws the government has an important part in encouraging and fostering economic growth. One of the ways that government can manipulate the trends in the economy is called a fiscal policy. A fiscal policy according to Colander is an intentional change made to governmental spending or taxes that leads to either stimulation or a slow down in the economy (2004). The contents of this paper will show

Fiscal Policy Essay

709 words - 3 pages IntroductionDuring week three of Economics 360 at the University of Phoenix I participated in a simulation to demonstrate fiscal policy. During this simulation I discovered several topics relating to what I was learning in the text. Some that I will discuss further are limitations of fiscal policy, either positive or negative, how I relate what I have learned in the simulation and how can I translate that into my work environment.First, fiscal

Fiscal Policy Essay

616 words - 2 pages Fiscal Policy Supposing the status quo of the United States today states that: there is no real unemployment, the consumer price index is rising at 2 percent annually, and the federal government budget deficit, 200 billion dollars, is equal to 5 percent of the gross national product. Now, the question is how and what changes will result from fiscal and monetary policy. For example, if legislation has just passed which holds

Fiscal Policy Essay 520 Words

520 words - 2 pages The purpose over this paper is to summarize the Fiscal Policy analysis that I have accumulated for this simulation. This simulation exams the importance of fiscal policy of a government in setting the level of pubic expenditure and how should the expenditure be funded.The effects of the changes in the fiscal policy of this simulation were based on injecting money in a particular area such as government spending on infrastructure; government