The Role of Government in Helping the Economy, Questions and Answers

Keynesianism and monetarism are both ways to stabilize the economy and promote growth when need. In keynesianism, government uses fiscal policy which is a list of policies that government spending and taxing can be used to improve the performance of an economy. The government produces stabilization by taxing and

In addition, the government spending is one of the components of aggregate demand, consequently, lower GDP. In a demand-deficient recession, consumption and investment tend to decrease due to lower income and revenue, the (X-M) component tends to level off or worsen in short run, which makes government spending an essential device to stimulate the economy. Therefore a decrease in the government spending will cause an even deeper recession and a larger budget deficit.

The economy can be impacted by the U.S.government through two major types of economic policy. The first type is called fiscal policy, which is economic policy instigated by the President or by Congress. The fundamental tools at the disposal of these branches of government are taxation law and government spending. By changing tax laws, the government can effectively affect my personal finance by modifying the amount of disposable

Another form of macroeconomic policy is fiscal policy, which involves the use of the Commonwealth Government’s budget in order to achieve the Government economic objectives. By varying the amount of government spending and revenue, the government can effectively alter the level of economic activity, which in turn will influence economic growth, inflation, unemployment and the external indicators of the economy.

In the past, the nation’s government took the “laissez-faire” approach to dealing with the economy and/or free market affairs. The government intervened as little as possible, asserting the belief felt that if left alone, economic problems would be resolved without government interference. However, this approach was not guaranteed, and at times, the government had to put aside the “laissez-faire” approach of the past. The government had no other choice but to intervene in these instances to return balance to the economy and protect its citizens it served. The government changed both its approach and its size through programs initiated by the Industrial Revolution, New Deal programs during and following the Great Depression, and World

If the US economy were experiencing a market failure like under provision of public transport or education, the government would be advised to increase expenditure on these areas. In the end, this may lead to a rise in productivity, which in future, it will cause a high economic growth rate and increased tax revenues. Nevertheless, government spending does not necessarily cause a rise in productivity. The US government has promised to increase expenditure on NHS that is expected to orchestrate a rise in the economy. However, this sort of extended spending is uncertain to increase the rate of economic growth (Boyes & Melvin, 2008).

Should minimum wage be increased? In my opinion, it should not be raised. But why not? If the minimum wage increases, the cons will be more effective than the pros. For a start, everyone with the higher paying jobs will want more money. Leading more money to be made and the price of goods will rise. Say right now, the minimum wage is 8.05 and if they rise it to 10$, everyone else that was getting paid 10$ an hour will want an increase as well. And it will keep going on until every job gets a raise. Also it wouldn’t be fair for the people who worked hard and some even go to college and would get paid only 10$ an hour for a start as too someone who got there first job and with no experience

I strongly believe that we should raise the minimum wage. All of the outcomes that would come from this event, are all positive for the majority of all the classes. Raising Minimum wage would not only benefit for the people, but also in the business world. More people would want to work for companies which would means an increased body of workers and more income. Raising the minimum wage would also help out families in the community all over. Several families are basing their daily living on the minimum wage they’re receiving from their job. Raising the minimum wage would help families out tremendously due to the fact the parents barely can afford food each night on the table let alone allowing

“The path to economic growth is not engineered by the government; rather, the path to economic prosperity is built by the people.” This quote relates to classical liberalism because it displays a ring wing perspective, which indicates devalued government authority in relation to aspects of individualism. Overall demonstrating the economic perspective that favours the absence of government involvement. It brings into question what the most efficient way to run an economy is, and what is the best way to manage an economy to maintain stability. Some believe that government intervention in an economy is dangerous because it adds to the nation’s overall inflation rate and national debt. Friedrich Hayek is an economic theorist supporting little

If our government didn’t spend anything would we have any type increase in our economy? I do not thing we would. Who would pay for the necessity things we need in order to thrive as a country. How would we keep up with our transportation system, invest in our future or keep us from totalitarianism? We have to have some type involvement from the government. I the 2016 election outcome came due to the fact that a lot of people felt like President Obama and his administration implicated too many policies that increase government spending. Such policies geared towards health care reform and income inequality. All in which increased taxes for each individual. I think a lot of people feel like the last eight years of government spending cost the tax payers a lot of unnecessary money. People were paying taxed for programs they didn’t support or agree with. “In fiscal year 2015, the federal government spent $3.7 trillion, amounting to 21 percent of the nation’s gross domestic product (GDP). Of that $3.7 trillion, over $3.2 trillion was financed by federal revenues. The remaining amount ($438 billion) was financed by borrowing. As the chart below shows, three major areas of spending each make up about one-fifth of the budget” (Center on Budget and Policy Priorities). This article outlines the major areas of spending which are

The government relies on collecting taxes in order to create revenue and function successfully. A decrease in taxes affects business and the government differently. A decrease in taxes is good for business and bad for the government. Many entitites rely on government funds in order to operate and function

Let us start by discussing why does the government spending increase during recession? Firstly, because the economy goes into recession, many workers loose their jobs and at the same time the corporate profits decline. As a result the income tax revenues for the government decline. Secondly, because several workers have lost their jobs, this results in the increase in the use of government supplement programs to help them out in their difficult times. Thirdly, to help the perturbed workers, the government creates new “social” programs during such times. Thus the government spending rises. It rises not just because of the increased

The government is spending too much time on helping their states and not looking out for the economy as a whole. The government is spending too much money on the environment and it is preventing construction and infrastructure to grow. The government has also added hundreds of regulations that have not helped business owners such as the federal tax codes, the affordable care act, overtime rules and much more. These examples of why the government is not looking out for the average American have initially slowed the economy down.

Fiscal responsibility is an important part of stability and the government must focus on maintaining the economic stability. As we all know, Government dept can quickly become a burden on the economy and weaken it. Macroeconomic policies change credibility of the government and strengthen political institutions. It is very important that our economy has credibility and stability because it’s vital to us Americans long term investment decisions that allow the US economy to grow. Government provide stability by ensuring to maintain stability of currency, enforce-defend property rights, and provide oversight that assures private citizens that their transaction partners in marketplaces are

Ans. Adam Smith trusted that in Laissez Faire framework government does not meddle in the activity of the economy and Smith said that economy will accomplish the best useful for the best number however this is just conceivable if everybody takes after self - intrigue. Where Keynes' feelings for private enterprise were comparable as Adam Smith and Keynes said that legislature need to intercede with a specific end goal to leave the monetary droops.