Question

Give an example of 1 current fiscal and 1 current monetary policy. Comment on the effectiveness or potential effectiveness of the policy, what it addresses and positive/negatives outcomes of each.

Answer 1

Fiscal Policy:- Fiscal policy refers to the strategic decisive policy of stablizing the government's taxation and spending activities in order to observe the situation in the economic development of the country.

Monetary Policy:- Monetary policy refers to the function of the central banks to monitor the flow of money supply and the rate of interest by fostering the stable rate of macro-economic indicators like inflation, GDP, employment level.

Current Fiscal policy:- Under the leadership of President Trumph, the Federal Government has passed the new tax and the budget bills in order boost the economy. Real fact is that the US Government has enacted the new fiscal Amendment called Tax Cuts and the Job Act - 2017.

Effectiveness and Negativeness on the US economy:- Tax Cuts and the Job Act - 2017 favors only for the Corporate companies as they got more tax remedies to the Government. Though the government set aside the critical issue of lessening the public debt of crossing over 15.7 trillion, It believe that tax remedies to the companies will provide ample of opportunities to jobless labourers. But in contrary it will not help the common and middle class people who will not get benefit from this Act. Anyway this will not ruin the economy as a whole. But it warns the act of Trumph.

Current Monetary policy:- . The Governors of the Federal bank has recently adhered the policy which created the favorable situation of balanced rate accompanying the flexible flow of inflation from the Last Quarter year of the 2018 to First Quarter of the current year of 2019 which ranges to only 2 1/2 percentage.

Effectiveness and positive sign on the US economy:-. FOMC - Federal Open Market Committee has designed its goal of maintaining the percent up to 2 1/2 percentage of inflation which gives safety and secure economic development with more financial stability with more positive economic sign on Employment, GDP, Trade Surplus. The current inflation rate will favor the sound economic stability throughout the year.