Question

Q: Write a short note on any two of the following:

1. The Economic Impacts of Inflation
2. The impact of the depreciation of Pakistani rupees on trade.

c.The role of Fiscal Policy in macroeconomic stability

Answer 1

Ans:-a) The economic impact of inflation

Inflation liable to rise the tottal cash revenue(nation's revenue) of the public and increase the spending and production process  also.Correspondingly,the employment also increase for the purpose of increasing production.The price of all available raw materials are also increased ,that means the energy price increase,nutrition price increase,all commodities ,products and services are also increase due to the influence of inflation,that affect the entire economy of a nation.The increasing price (inflation) influence people's living cost,business cost,increasing loans etc..These are badly affect the economic system of a nation.

Ans:-c)The role of fiscal policy in macro economic stability

Fiscal policy is the important method to stabilize the economy of a nation.When economic dealings of a nation are in control there macro economic stability occur.The economic dealings of a nation depend on fiscal policy .For example nation's investiment and saving,stable economic income and expenses,balance and expense etc of a nation is in a state of stable condition there arise macro economic stability.So fiscal policy play a vital role in the macro economic stability of a nation's