Question

Examine the fiscal policies in place from 2000 - 2010 in relation to their effects on macroeconomic issues. For instance, consider the level of government spending, taxation, subsidies, unemployment benefits, and so on. You will need to provide details on the policies and examine how they were related to macroeconomic issues at the time.

sites such as the following should be used and sited

•– start with these sites:

•Congressional Budget Office

•White House website

•Economic Report of the President (from FRASER, which has many other great resources)

•National Bureau of Economic Research

Answer 1

The primary and most important aspect of a fical policy is the handling of the Revenue generation by the means of goverment policies such as Taxes and Duties.

The issues in fiscal policies are 3 in nature:

1. Lags : The lags are of 3 types namely 1.Recognition Lag, 2. Implementation Lag , 3.Impact Lag.

2. Crowding out which is effect of investment not as desired due to an increase in interest rate.

3. Policy choice which could be expansionary fiscal policy or Contracting fical policy

                    There are three widely accepted goals of macroeconomic policy. Take note, however, that macroeconomic policy is a tool, like a screwdriver. The accepted use of a screwdriver is to put screws in and take screws out. Everyone knows you can use it to open cans, but that is not "what it is for."

Likewise, if there is a government (the entity that sets macroeconomic policy) with nefarious goals, they could accomplish those goals using macroeconomic policy. They might want to suppress a certain group of people economically, or make sure that all the profits in the economy are controlled by them. In theory, there are ways they could do that. However, we do not accept those goals as "goals of macroeconomic policy" because they are not benign goals. That being said, here are the 3 legitimate goals:

1. Positive economic growth. This means we want GDP to go up, which it does in growth periods, but we don't want it to go down. When there is negative growth, it is called a recession. It is our goal for positive growth, the opposite of recession.

2. Full employment. We would like our macroeconomic policy to be such that the vast majority, about 95%, of people who want a job at any given point in time can have a job. Simply put, we want to avoid high unemployment.

3. Price stability. We don't want prices to go way down because that would put many companies and people out of business. We also don't want prices to go way up and hurt consumers. That means we want predictable, steady inflation of 0.5% to 1.5%, give or take, it can go higher without causing much trouble.

Those are the three goals of macroeconomic policy in the civilized world. Again, any "government" or even insurgent group (such as ISIS or Kim Jong-un or Hitler or anybody even) will have their own goals. If they are powerful enough, they are able to set macroeconomic policy to achieve those goals. However, only positive economic growth, price stability, and full-employment are the classical goals of macroeconomic policy. Equality is not considered a macroeconomic goal in the classical sense because market forces in each industry shape the relative incomes of people. Macroeconomic policy is just concerned with the total income of everybody, calculated as GDP or GNP most commonly.