Question

In: Economics

What is the Trump plan for fiscal policy? Incorporate a definition of fiscal policy for both...

What is the Trump plan for fiscal policy? Incorporate a definition of fiscal policy for both recession and inflation, and explain how having Congress and the Presidency from the same party will influence taxing, spending, and the budget deficit.

Solutions

Expert Solution

Donald Trump wants to move fiscal policies in a new direction that ends waste, demands accountability and more personal responsibility and funds only what has a proven track record of what works. He also want the government to become lean and efficient and customer friendly. He wants government begins to pay its bills. Due to fiscal policy the annual growth rate robust. The increase in tax rate for higher earner will provide the more revenue for the public sector that will help in education economic stablilsation.

The ability of fiscal policy to affect output by affecting aggregate demand makes it a potential tool for economic stablisation. In a recession the government will can run an expansionary fiscal policy thus helping to restore output to its normal level and caon enhance employement opportunities, Fiscal policy also changes the burden of future taxes. When there is inflation in the economy than the government will increase the tax rate so that the flow of money in the market is control and as a result the inflation rate can be control.

The congress party and the presidency from the same pary will influence taxing , spending and the budget deficit is the excess of govenment outlays over receipts taken for taxes, fees and charges levied by government. The increase in tax rate and investing the money in different sector will increase the rate of employment and the GDP of the country increase and the spending will increase and if the spending is increase than there is flow of money in the economy and the Trump government will remove the problem of budget deficit.


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