Question

Who is in charge of making fiscal policy? What fiscal policy measure has a direct impact to the economy? If consumer confidence is low, which of the following will be the most effective fiscal policy? An increase in government spending, or An equal decrease in taxes? Explain your reasoning.

Answer 1

In the United States, fiscal arrangement is coordinated by the official and authoritative branches. In the official branch, the two most compelling workplaces have a place with the president and the Treasury secretary, albeit contemporary presidents frequently depend on a board of monetary counsels. The U.S. Congress passes laws and appropriates spending for any financial strategy measures. This includes investment, thought and endorsement from both the House of Representatives and the Senate.

A more straightforward effect is watched if taxes are diminished. By expanding or diminishing taxes, the administration influences families' level of discretionary cash flow. In the event that buyer certainty is low, at that point I believe that diminishing charges would help purchaser certainty more than government spending. Diminishing assessments will enable customers to have more cash and feel better returning it to the economy. Expanding governments pending can in the end positively affect buyers, however to see a prompt lift in customer certainty I figure diminishing charges will have the most effect.