ECO 202 Project

.docx

School

Southern New Hampshire University *

*We aren’t endorsed by this school

Course

202

Subject

Economics

Date

Feb 20, 2024

Type

docx

Pages

8

Uploaded by CountSnow20195

Report
ECO 202 Project Template Economic Summary Report Table of Contents 1. Introduction 2. Fiscal Policies: Taxation 3. Fiscal Policies: Government Expenditure 4. Monetary Policies 5. Global Context 6. Conclusions 7. References Introduction For the benefit of the incoming administration, I submit this report to document, analyze, and interpret the macroeconomic policy decisions I made as the chief economic policy advisor of Econland. The purpose of this document is to further our national prosperity by deepening our understanding of the relationship between macroeconomic policies and their consequences for our citizens. The report includes a thorough accounting of the major fiscal and monetary policy decisions made over each of the seven years of my term, as well as an explanation of the underlying rationales for those decisions and the resulting impacts of those policies.
Table 1.1 The table above summarizes the macroeconomic climate of Econland over my term. Table 1.1 shows the results from my 7-year tenure in charge of Econland’s economy in the stagnation category of the simulation. Over time, I proceeded to introduce several modifications to gauge their effect on the economy. The cost of borrowing, net capital outflow, and various other factors can be influenced by a country's interest rate, which appears to be the benchmark for assessing economic growth. This, in turn, can facilitate the formulation of policies on government budgeting and taxation (Mankiw, 2021). Eventually, I implemented a substantial alteration that led to a small growth in the economic state. Throughout my term, my approval rating maintained an average of 65%. Fiscal Policy: Taxation Table 2.1 My objective in devising taxation policies was to encourage equitable contributions from all parties, including individuals and businesses. To that end, creating a fair system that could fund vital government services was at the forefront of my approach. I utilized economic principles like supply and
demand and marginal taxation to establish an unbiased taxation process. Additionally, applying the concept of elasticity of demand allowed me to formulate a system that would generate sufficient revenue without placing undue strain on individuals and businesses. Corporate tax rates can powerfully impact a business's profits and motivate specific investments and behaviors. Amendments to income tax rates can alter the funds individuals and households have at their disposal, ultimately influencing the economy. Additionally, changes to these tax rates can affect a government's revenue, which assists in financing public services. As taxes decrease, people have more money to expend, possibly stimulating consumption. Decreased taxes can fuel investment from businesses and subsequent economic growth. While lowering taxes could also lead to government revenue reduction, constraining the administration's ability to finance public services. The impact of lower taxes on the economy can be multi-faceted, with the potential to stimulate growth while decreasing government revenue and ultimately leading to budget deficits. These effects were observed in notable instances, such as the Reagan tax cuts ("Reagan tax cuts", 2023) and the Bush tax cuts ("Bush tax cuts," 2023), which created economic growth but harmed the budget balance. Conversely, the Clinton administration's tax increases ("Economic policy of the Bill Clinton administration," 2023) positively impacted economic growth and a budget surplus. Precisely accurate macroeconomic predictions were made for specific policy changes. This was exemplified by the Reagan tax cuts, where the models prognosticated that the cuts would lead to slower economic growth and an increased budget deficit, which indeed occurred. A similar forecast for the Clinton tax increases predicted economic growth and budget surplus, which subsequently ensued. Fiscal Policy: Government Expenditure Figure 3.1
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