Question

How does fiscal policy determine the rules of the market? Who controls the rules of the market? Are the rules fair? Are people paid what they are worth in the market? Should labor unions be encouraged? Why is it critically important for wages of the middle class to rise for the economy to recover? (Discuss in terms of Keynesian theory).

Answer 1

There are numerous Tools which are used to determine the rule of market but tax change or government spending are most common and effective tools which are used by fiscal policy to control market .. Like if government imposed heavy import duty on china for importing aluminum . Then in case U. S companies are force to search domestic company with high rate and force him to order. So it clear that rule are always not fair as a government sees the economic balance . While no doubt that the corporate main motive are connected with profit irrespect of economic imbalance . People are not always paid fairly due to demand and supply dynamic . It is only minimums wages which play as threshold level so they pay commensurate way.

So the Only way it that. That labour Union have to fight back with corporation for brings new effective change for better economic growth .

No doubt middle class income is more important to grow because they are most part of the population and they also pay most of the taxes because they are the innovators, consumption driver that also take investment and consumption as necessity and help in economic growth .