Economic Policies And Economic Policy

When there are problems in the United States economy, whom do the people turn to? The most obvious answer is the government. The federal government is given the responsibility of maintaining a stable economy. When the economy is not stable, like during a recession, the American people turn the government and demand that they fix whatever problem is occurring. The government can handle the economy in a recessionary period in one of two ways: expansionary fiscal policy or expansionary monetary policy. The sector of the government that handles the economy using these policies in a recession is the Federal Reserve. The best course of action to get the United States out of a recession is to use expansionary monetary policy.

These are all about how and to what extent a government mediates in the economy. This can incorporate – government policy, political steadiness or precariousness in foreign markets, foreign trade policy, tax policy, labor law, environmental law, trade restrictions and so on.

1.Consider the following entry game.  Here, firm B is an existing firm in the market, and firm A is a potential entrant.  Firm A must decide whether to enter the market (play "enter") or stay out of the market (play "not enter").  If firm A decides to enter the market, firm B must decide whether to engage in a price war (play "hard"), or not (play "soft").  By playing "hard", firm B ensures that firm A makes a loss of $1 million, but firm B only makes $1 million in profits.  On the other hand, if firm B plays "soft", the new entrant takes half of the market, and each firm earns profits of $5 million.  If firm A stays out, it earns zero while firm B earns $10 million. Which of the following are Nash equilibrium strategies?

It is clear that the economic policy in general and the monetary policy in particular should be concerned with the overall economic well-being. In this paper we propose to discuss this core topic. We will provide an overall picture of the functioning mechanism. In this regard, the discussion will develop around the governmental policies and of FED, and their scope on the free market. The argumentation will refer to the notion of common good and will try to establish if the measures applied by FED have fulfilled their intended purpose given the recent international financial crises of 2007.

Government plays a crucial role in the market economy by ensuring the laws and regulation are abide by, and control the production of the private sectors, although, over the years its efforts in controlling such economies are minimal and insignificant. Market forces of demand and supply play a major role in setting trends that such market economies follow. Economic growth, inflation, interest rates, wage rates of workers and unemployment rates are some of the fields the government takes part in controlling, to boost the Gross National Product (GNP) of the state.

With the American general election cycle in full swing, one of the fundamental issues in play is the role of government. What is the place of Government? What should elected officials be doing? Do they simply protect personal liberties, or do they also establish safeguards and guidelines for various economic activities? Ask any two people and you’ll likely receive two different answers, so nuanced and complex is the issue. Policy can give incentives to business to act a certain way both domestically and abroad. Tax incentives in one region may cause a corporate to relocate (this happened to one of my favorite guitar manufacturers recently, as they moved production from Canada to California!). A central bank’s tweak in monetary policy to shift the cost of lending could ultimately move interest rates for consumers looking to take out mortgages or automobile loans. As we witnessed in 2008, the housing market is of international concern and a large central bank wields enormous power. While we like to call the Western economy a “free market,” there exists a multitude of government policies that impact the freedoms and movements of the economy, for better or for worse. I will present two specific examples of government economic intervention for your consideration, one that has helps economic activity and another that hurts it.

There are fiscal policies that that are not workable like direct relief payments, or other form of direct subsidies. It will just encourage dependence to the government, but the expansionary fiscal policy like the “New Deal’s WPA were necessary. It is a slow process but in the long run economy will stabilize. The gov’t initiative acted as an “anchor” to keep the economy from complete devastation.

According to the situations of their countries, they announced varies kinds of different economic policies to boost the economy, which affects the country in many different aspects. This gives an interest for me to study how the economic policies affect the whole country's development.

Economic policies pave the roadway for how America operates. It determines the successfulness of the country or the downfall. When we look at today 's biggest problems such as; social security, globalization, poverty, immigration, etc. there is a common theme. That is, that the state of our economy impacts all them.

In order to control economic inflation and recession problems such as the recent mortgage crisis discussed at the onset. An economic policy mix of expansion and contraction methods is used to control aggregate supply and demand. Expansionary fiscal policy is more effective in improving the real economy. Expansionary monetary policy is better suited for controlling the financial economy. Fiscal policy can be target, whereas monetary policy tools are blunter, both types of policies impact consumers and businesses in different

The most know economy is a mixed economy. Economies have to decide how much or how little they want from each economy. They have to take from traditional, market, and command economies, in order to make mixed economy. In order to make this decision they have to answer many questions. They have to look at what more people in the economy want and what they will buy. If I were to make an economy I would look at what people I have in my economy. Do I have more traditional people, people who want the government to make the decisions, or people who would rather make their own decisions.

Economic policies that we see today arose out of necessity during the Renaissance period. As individual states formed and trading of individual goods began; a system was needed so that goods could be exchanged without collapsing the currency of any of the realms. The same concept is true of economic policy today. Regulations are required so that we can trade goods while not causing inflation. It effects the prices of goods and how readily available they are. If it is being managed well, then we have access to products from around the world. It also keeps the U.S. dollar from losing value. There are three common approaches used in our country today: supply-side economics, demand-side economics, and monetary policy.

What is supply-side economics to you? Well, Supply-side economics are policies designed to stimulate output and lower unemployment by increasing production rather than demand. This policy gained support in the late 70's. This policy used the Laffer Curve which was a hypothetical relationship between federal tax rates and tax revenues. The supply -side does not focus on the money supply in things. What do you know about demand-side policies?

In an economy, I think government should focus on keeping the economy stability and enhancing the growth of the economy. Two useful and common tools for government to stabilize the economy are fiscal policy and monetary policy. If government's spending is larger than tax revenues, it will lead to deficit, which government should be careful about it. It's because that will eventually accumulate and become national debt. Talking about different economic systems this week, they have both advantages and disadvantages. Pure communism eventually disappeared because governments in communism make all the economic decisions and this is not good. It has disadvantages like shortage and poverty. So government may want to balance between free markets

Political economy is the study of production and trade and their links with custom, government and law. It is the study and use of how economic theory and methods influence and develop different social and economic systems, such as capitalism, socialism and communism, and it analyzes how public policy is created and implemented. Since various individuals and groups have different interests in how a country or economy is to develop, political economy as a discipline is a complex field, covering a broad array of potentially competing interests (Investopedia).