Question

In: Economics

Write to either the President (on fiscal policy) or to the Chair of the Federal Reserve...

Write to either the President (on fiscal policy) or to the Chair of the Federal Reserve (on monetary policy) describing a specific policy action that you believe should be taken at this moment in time (e.g., lower taxes or buy bonds) and explain why you would take the action (what is currently happening in the economy and what will this action accomplish?)

Solutions

Expert Solution

To: The President, Fiscal Policy

Subject: increase government spending and reduce taxes to stimulate the economy

Mr. President,

I would like to say that the following policy modification should take place to stimulate the economy.

Federal government spending ought to be increased in particular areas such as manufacturing and healthcare to increase the need because federal government spending will function as a multiplier to the aggregate demand. A specific concentrate on selected markets will assist in better and more job opportunities. It will increase the non-reusable earnings likewise and it will help in increasing the demand for other items.

Deal subsidies to markets on the basis of their production activities. It will help them to work even if the prices are low. At lower prices of the items, demand will be high and more products will be offered. It will put the economy on the track of development and development. The subsidy will help manufacturers to sustain the economy.

Wave off taxes for a particular period for business owners and small companies to motivate them to start making efficient activities. It will restore work to many individuals. It will increase demand.

Measures taken by the fiscal policy will make monetary policy to be more effective. Financial and financial policy matches each other in helping the economy to come out of economic crisis and move ahead with development.


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