Fiscal And Monetary Policy In The UK

A case study is an intensive type of research that involves a process in which detailed information is collected

A case study is “a method of analysis and a specific research design for examining a problem” (University of Southern California, 2010). It can be used to analyze a person, place, event, or other subjects in order to help discover mitigating issues, misconceptions, failures, trends, or recommendations (USC, 2010). Case studies will be used to gain a better understanding of situations and topics to help others make better policies, procedures, and decisions (USC, 2010).

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.

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.

Case studies are one of the first types of research to be used in the qualitative methodology and repeating the study several times will lead to the increased reliability of the study (Starman, 2013). This methodology is appropriate because it will allow for data collection results to be generalized based on the theoretical propositions and not the population (Harrison et al. 2017).

When the Federal government has to find ways to regain any money lost they lean on the expansionary Fiscal policy and the monetary policy to regain money into the economy. Whether, a change in taxes or even government spending. Even to the three major tools of the expansionary monetary policy to focus on. In the first part of this paper, I will discuss the expansionary fiscal policy and how the Federal government was involved and the changes that needed to be made to taxes, government spending. The second part of this paper, I will discuss the monetary policy and the tools the Federal Reserve used when under this policy. The expansionary fiscal policy was out to kick start the economy, and the expansionary monetary policy was out to change interest rate, and influence money supply. When discussing these two policies you have to think about one aspect when will it ever stop? Will a policy always have to be part of the economy to help the government one way or another?

According to recent analysis from the International Monetary Fund (IMF), in 2010, the UK is estimated to have had the fourth highest level of structural government borrowing amongst the 29 advanced economies for which comparable data are accessible. This structural government borrowing is one of the main underlying issues that the Budget, over the reign of this current government, will try to address. However, at least according to plans published so far, the UK is intending the fourth largest fiscal consolidation among this same group of countries and so by 2017 the IMF predicts that the UK will have a lower level of structural borrowing than many other advanced economies, being below the average in the Euro area and below the average among the G20 and G7 countries.

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.

There are two powerful tools that the government and the Federal Reserve use to direct our economy in the right direction- Fiscal Policy and Monetary Policy. When these tools are used appropriately, they can fuel the economy and slow it down when it is growing too fast. Fiscal policy is concerned with government spending and collecting taxes. With the fiscal policy, you can increase government spending and decrease taxes to increase disposable income for people as well as corporations. Monetary Policy on the other hand refers to the supply of money which is controlled by factors such as interest rates and reserve requirements for banks. These methods are applicable in a market economy, but not in a communist or social economy.

The fiscal policies refer to the way in which the government affects those activities in the economy of a country. The major common fiscal policies that occur in the economy are the government expenditure and the level of taxation and they are usually advocated by the Central Bank of the country. The fiscal policies are a strategy that relates to the monetary policies that are used by the central bank of a country to control level of money supply in the country. The fiscal policies have a lot of influence on the money supply in the economy.

Fiscal policy uses changes in taxes and government spending to affect overall spending and stabilize the economy. The objective of fiscal policy is the governments’ typical use fiscal policy to promote strong and sustainable growth and reduce poverty. During periods of recession congress has the option to decrease taxes to give households more disposable income so they can buy more products. Therefore, lowering tax rates increases GDP.

Q1. How does the government use the fiscal policy and monetary policy to stabilize the economy?

How can monetary policy and fiscal policy greatly influence the US economy? Keynesian economics says, “A depressed economy is the result of inadequate spending .” According to Keynesian the government intervention can help a depressed economy through monetary policy and fiscal .The idea established by Keynes was that managing the economy is a government responsibility .

Case study is a qualitative research which emphasis on the investigation and explain the details of one or more cases and analyses of one or more cases. A case may be an individual (student, teacher, organization and situation or institution).

Since the global financial crisis of 2008, the UK government has been implementing various policies to combat the recession and stimulate economic growth. This essay will look at how effective the fiscal and monetary policies used since the crisis are in achieving the four-macro economic objectives. In addition, I will provide my input on the best way the UK government can carry out these policies.