Question

Fiscal policy impact of the Carter and Reagan administrations. Did the GDP, unemployment rate and inflation increased or decreased. And by what percent

Answer 1

Fiscal Policy impact of Carter Administration:

James Earl Carter was one of the prominent president in the list of presidents of United States of America. He was the 39th president of the US, serving the nation from the year 1977- 1981. He received the prestigious Nobel Prize in the year 2002. He took charge of the office when there was a stagflation { experience recession accompanied with a high unemployment} experienced in the economy. One of the most important success achieved under his rule includes the creation of almost 9.3 million jobs along the nation. His tenure is not smooth, but unlike it was covered with many sensational issues like the Iranian hostage issue.

The two challenges that he primarily dealt with includes the inflation and unemployment. At that time the value of the dollar in the stock market began to fall sharply and this became a great problem for the consistency of the economy of the nation. The import prices began to rise steeply and it negatively affected the economic prosperity.

And the important decision taken by the Federal reserve was the lowering of interest rates. And this decision helped the economy to take hold slowly and also most importantly it resulted in the creation of millions of jobs. And after the appointment of Paul Volcker as fed chair is a right step taken against the double digit inflation rate and by his measures the growing inflation rate has took into control. And also there reported an increase in the GDP of the nation.

And in the year 1981, the end of his tenure there recorded GDP growth percentage of about 2.5 percentage. And also he reduced the inflation rate which was 13.3 percentage in the 1979 to a 8.9 percentage in the year 1981. And the unemployment rate was 8.5 percentage in the year 1981.

Fiscal Policy impact of Reagan Administration:

Ronald Wilson Reagan was the president of United States for the two consecutive terms. His tenure starts after the Carter in the year 1981 and ended in the year 1989. His policies and decisions was a very important step in the development of the economy. He was the 40th president of United States after Carter.

When he came into the action the economy was seriously affected with the recession and the great depression. The inflation rate was too high and also most significant thing is that there recorded a high unemployment percentage. Getting past these important tasks is not as easy as one might think. Because there involves a high risk and policies involved in this process.

He support a supply-side economics and his measures includes the tax cut which he believed that this will enhance the economy. He also limited the government control over the economy. And this all measures resulted in a growth in the GDP of the nation. And also he increased the spending in defense to strengthen the nation.

And in the year 1989, the end of his tenure there recorded GDP growth percentage of about 3.5 percentage. And also he reduced the inflation rate which was 8.9 percentage in the 1981 to a 4.6 percentage in the year 1989. And this shows his success and the progress of the economy. And the unemployment rate was 5.4 percentage in the year 1989.