In September the UK Government under the leadership of new Prime Minister Liz Truss announced a set of policies including: ^r. cuts to income tax rates 2. a commitment to billions of pounds of government subsidies for household energy bills. The UK has an inflation rate that is above their target rate and the UK Government is currently running a budget deficit. How these policies would be funded was not specified. Immediately after the announcement of these policies, investors started selling off UK pound assets as the market reacted badly to this announcement. Discuss these policies and their impact on economic variables. There is no single right answer here. Better answers will show depth of good economic analysis of these policies. Diagrams are not required
In September the UK Government under the leadership of new Prime Minister Liz Truss announced a set of policies including: ^r. cuts to income tax rates 2. a commitment to billions of pounds of government subsidies for household energy bills. The UK has an inflation rate that is above their target rate and the UK Government is currently running a budget deficit. How these policies would be funded was not specified. Immediately after the announcement of these policies, investors started selling off UK pound assets as the market reacted badly to this announcement. Discuss these policies and their impact on economic variables. There is no single right answer here. Better answers will show depth of good economic analysis of these policies. Diagrams are not required
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 11SQ
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In September the UK Government under the leadership of new Prime Minister Liz Truss announced a set of policies including:
^r. cuts to income tax rates
2. a commitment to billions of pounds of government subsidies for household energy bills.
The UK has an inflation rate that is above their target rate and the UK Government is currently running a budget deficit. How these policies would be funded was not specified. Immediately after the announcement of these policies, investors started selling off UK pound assets as the market reacted badly to this announcement.
Discuss these policies and their impact on economic variables. There is no single right answer here. Better answers will show depth of good economic analysis of these policies. Diagrams are not required.
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