The President Of Bartavia 's Fiscal Policy With The Intention Of Manipulating Inflation And Unemployment

The fiscal policy is when the government changes its spending level and tax rates to monitor and influence their economy. The government will need to increase tax revenues to fund expenditure by increasing taxation by adjusting the income tax level.

In the first part of this paper, I will discuss the effect that the expansionary fiscal policy had on the Federal government and the impact on these changes the expansionary fiscal policy when it came to taxes and Government spending. Let’s start by talking about how taxes had to have necessary changes when it came to expansionary fiscal policy. You can think of taxes as being taxes that come from consumer spending, taxes on checks or even taxes on things you own. When thinking of what taxes affect the only

Expansionary fiscal policy is a form of fiscal policy that involves decreasing taxes, increasing government expenditures or both in order to fight recessionary pressures. A decrease in taxes means that households have more disposal income to spend. Higher disposal income

A contractionary fiscal policy occurs when government spending is reduced either through from an increase in tax revenues or reduction in public spending and is used in periods in which it seeks slow the growth of aggregate demand. While an Expansionary Fiscal Policy implies an increase in public spending through increases in public spending or lower tax revenues. You can apply expansionary fiscal policies when seeking to increase aggregate demand.

Monetary policy is the regulation of the money supply to influence variables such as inflation, employment, and economic growth. Fiscal policies, on the other hand, use the ability to tax and spend in order to influence those same variables (McEachern, 2014, p. 57). A blend of both of these policies is essential for improving the economy when a recession has occurred.

Targeting interest rates that can directly control inflation. The monetary policy is one that quickly comes into play. Central banks are independent of the government and refrain from political influence. They can boost exports by merely weakening the currency. The benefits of the fiscal policy consist of direct spending to specific purposes, by using taxation they can discourage negative externalities, and have a shorter time lag. The potential costs of the policies can create budget deficits, having to spend tax incentives on imports, and may be motivated by politics.The use of the monetary policy runs the risk of hyperinflation, the time it takes for the effects to materialize, the technical limitations and the fact that financial tools affect the entire

Fiscal policy is used by the federal government to direct the economy. Fiscal policy can affect borrowing and the size of an organization’s tax bill. The amount of spending that the government makes directly affects the economy. The spending can also enhance growth within the economy by increasing funds available for organizations to fund capital expenditures.

The government, by the way of its taxing, ability to spend, and controlling money supply attempts to promote full employment, price stability, and economic growth. The government strives to gain these objectives by taxing and spending which is called the fiscal policy. There are tools of the fiscal policy and they are sorted into two broad categories. The first one is called automatic stabilizers which are revenue and spending programs in the federal budget that automatically adjust with the ups and downs of the economy to stabilize disposable income and consumption and real GDP. The second one is the discretionary fiscal policy which requires the deliberate manipulation of the government purchases, transfer payments, and taxes to promote macroeconomic goals, some of these discretionary policies are temporary.

However, during a period of global recession the Government’s implementation of expansionary fiscal and monetary policy saw taxation revenue fall and government spending increase, sending the budget into deficit by -$32.9 billion in 2008-09 . The 2009-2010 Budget continued expansionary policy to support economic growth and slow the rise in unemployment. The falling inflation rate of 1.5% in 2008-09 , meant it no longer played dominant role in policy making decisions. The tradeoff between inflation and unemployment can be observed in Figure 3.5 .

In this paper, I will tell you about the United States' Federal Government and how they enact their countries Fiscal Policy. I will also speak of the times where the economy can not help themselves what the government must do. Even though I will also tell you whether or not I think the fiscal policy is well executed and who Ben Bernanke and John Maynard Keynes is, while further elaborate about discretionary fiscal policy, and speak of the times when the government must step in to improve the economy when the economy can not help itself. In my opinion, our country as a whole is improving with its economic growth, price stability, and full employment.

We know that the expansionary fiscal policy can cause inflation, And eventually will, Meaning that at certain point the fiscal policy many need to change in order to keep inflation out of hand or either my limiting unemployment.

From the article, we can conclude the weakness in fiscal policy. There is no doubt that fiscal policy do contribute to economic growth but it is only for short run, We must understand that increase in government expenditures will end with a increase in tax.

In a situation where the country is in a period of high unemployment, interest rate sare at almost zero, inflation is about 2% per year, and GDP growth is less than 2% per year the Federal Reserve System would have to focus on monetary policy and the government would have to concentrate on fiscal policy. The Fed would thus need to install a stimulative monetary policy in that would better the economy's Gross Domestic Product in the future. Monetary policy would, however, have to be regulated in order to keep inflation in its current position. By cutting taxes, introducing stimulative fiscal policies, and increasing spending, economic growth is likely to occur in the short run.

Fiscal Policy involves the use of changes in government spending and taxations to influence the level and composition and aggregate demand in the economic and giving the amount involve is clearly as important implications for business

| Advocates of active monetary and fiscal policy view the economy as inherently unstable and believe that policy can manage aggregate demand, and thereby, production and employment, to offset the inherent instability. When aggregate demand is inadequate to ensure full employment, policymakers should boost government spending, cut taxes, and expand money supply. However, when aggregate demand is excessive, risking higher inflation, policymakers should cut government spending, raise taxes, and reduce the money supply. Such policy actions put