Say the economy is in recession and you arr the newly hired Federal director of fiscal...

Say the economy is in recession and you arr the newly hired Federal director of fiscal policy and have been given the job of creating policies for the next four years that will aid the economy in emerging from recession and beginning a course of healthy economic growth. ( 2 pages or a good essay please)

Expert Solution

As being the director of fiscal policy, I will help in the strategy formulation to help the economy to overcome the situation of recession. Here are a number of factors which can be used in this regard.

The attempts will be made to improve the GDP growth by motivating the internal private investment in the economy including the different internal investors and attracting the investors from outside by reducing the tax brackets and providing some incentives to these investors so that business corporation and growth can be ensured. I will also suggest to cut down the excise and custom duty charges on the imports of raw material in order to boost the production in the economy.

My focus will also remain on improving the service exports including almost all types of services such as banking, tourism, supply chain and so on. I will also make some policies which can boost the consumer spending by providing low-interest loans.

A policy can also be framed so that the profit which is sent by MNCs to their home country can be reduced in a great deal and promote these firms to invest this amount in the economy itself so hat GDP and investment can be improved.

The attempts will also be made to improve GNP by the exclusion of profits made overseas. In order to improve the production in the economy, easy loans at moderate rates will be provided to the produces.

Monetary Policy

In order to boost the expenditure and purchases from the customers, I would eye o reduce the interest rates on the loans given to the end customers. This will help in increasing the demand in the economy which will start the production cycle and reducing the unemployment, improving the investment and higher wage rates and improved GDP. However there can be some chances of increased inflation but in order to improve GDP, this can be managed.

Introduction of Moderate Fiscal Policy

I will propose to reduce the income tax brackets applied to the common citizen in the country. This will help in making the more money in the pockets of the customers which can be spent on buying new products and service and improved demand in the economy. This will help the country to achieve greater GDP growth rates and a demand push resulting from the inflation.

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Rahul Sunny answered 1 year ago

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