Government economic policy is concerned with influencing or controlling the behaviour of the economy. It is the implementation and administration of policies typically implemented by the government. Economic policy is often focused on decisions made in regards to government spending and taxation, the redistribution of income from rich to poor and the supply of money. Economic policy directly affects global issues as decision by government dictate events in the economy. A prominent example of economic policy as a result of global issues would be the decisions made by the UK government after the global financial crisis. Following a period of economic boom, a financial bubble burst this occurred on a global scale. This resulted in some of the world’s largest financial institutions to collapse. With the preceding recession, the UK government and many others resorted to large-scale bailout and rescue packages for the surviving banks and financial institutions and alternatively imposing harsh austerity measures on themselves to decrease economic spending. This recession saw governments globally lending large sums of money to funnel into the economy to ensure survival; this takes me on to the next example the issue of global debt. This directly affects decisions made by the UK government in regards to economic policy. In recent times the new Conservative government has made extensive cutbacks in health, education and other vital social services such as welfare and benefits. These structural adjustment policies are aimed at reducing economic debt; however these recent cuts have seen many UK households struggling to survive and have landed a solid blow to the increasing poverty situation in the UK. Although the Conservative government jus... ... middle of paper ... ... from certain areas will have a negative effect. However recent income tax reforms will benefit all individuals earning less than £100,000, an increase in personal allowance in 2015 will see a vast majority of earners better off , this will see personal allowance rise from ££10,000 to £10,500, this additional non taxable £500 will permit 288,000 to go free from income tax, leaving them with more disposable income. This is seen as method geared towards redistributing income as low income earners are able to retain more of their wages and those who are in higher earning brackets continue to be taxed, this is considered progressive taxation. Recently redistribution of income has also occurred through measures such as an increase in the national minimum wage and tax credits extended to working families and families with children through working and child tax credits.
In this essay I will be discussing the features of Scotland’s mixed market economy, describing four aspects of the Scottish economy; Tourism, unemployment, growth and the NHS.
The national debt surfaced after the revolution when the United States government had to borrow funds from the French government and from the Dutch bankers. By 1790, the U.S. government accumulated millions in debt, but no one knew precisely how much. The Constitution mandated that the new government take over the debts of the old government under the Articles of Confederation.
Many adolescents, In the Great Depression, received the full affects and suffered. Some were left hungry, impoverished, and hopeless, how are adolescents today compared? The 30’s were a time of great distress for many Americans. Events such as the stock market crash, an economy suffering from being inflated, overuse of credit, a farming crisis, and other events led America to the economic downfall known as the Great Depression. During the great depression, the unemployment was high, the wages were low, lines stretched around the city for food, families that lost their house had to live in makeshift homes in communities called hoovervilles, and children had to stop school to work for money. Teens effected by the Great Depression worked hard for low wages to try to put food on their family’s table. Today, teens are gluttonous and live a very care free life style with financial stability of their families. As you can see adolescents in the Great Depression differ much from today.
What caused the Great Recession that lasted from December 2007 to June 2009 in the United States? The United States a country with abundance of resources from jobs, education, money and power went from one day of economic balance to the next suffering major dimensions crisis. According to the Economic Policy Institute, it all began in 2007 from the credit crisis, which resulted in an 8 trillion dollar housing bubble (n.d.). This said by Economist analysts to attributed to the collapse in the United States. Even today, strong debates continue over major issues caused by the Great Recession in part over the accommodative federal monetary and fiscal policy (Economic Policy Institute, 2013). The Great Recession of 2007 – 2009 enlarges the longest financial crisis since the Great Depression of 1929 – 1932 that damaged the economy.
In economics, a recession occurs when there is a slowdown in the spending of goods and services in the market. A recession causes a drop in employment, GDP growth, investment, as well as societal well-being. All recessions are caused by a specific cause, but the Great Recession of 2007-2009 was caused by a crash in the housing market. This crash was triggered by a steep decline in housing prices. All of a sudden, people bought houses because there was an excessive amount of money in the economy and they thought the price of houses would only increase. (Amadeo, 2012). There was a financial frenzy as the growing desire for homes expanded. People held a lot of faith in the economy and began spending irrationally on houses that they couldn’t afford. This led to overvalued estate and unsustainable mortgage debt. (McConnell, Brue, Flynn, 2012).
To understand the power struggle relating to foreign policymaking, it is crucial to understand what foreign policy entails. The Foreign Policy Agenda of the U.S. Department of State declares the goals of foreign policy as "to build and sustain a more democratic, secure, and prosperous world for the benefit of the American people and the international community." While this definition is quite vague, the actual tools of foreign policy include Diplomacy, foreign aid, and military force.
To the nations rescue, President Franklin D. Roosevelt was elected and provided many alternative solutions for the repair of America. Roosevelt supplied hundreds of thousands with jobs. He also had acts passed that saved banks and found solutions to protect American jobs. The beginning of World War II marked the ultimate end of the depression.
The Great Depression was the deepest and longest-lasting economic downfall in the history of the United Sates. No event has yet to rival The Great Depression to the present day today although we have had recessions in the past, and some economic panics, fears. Thankfully the United States of America has had its shares of experiences from the foundation of this country and throughout its growth many economic crises have occurred. In the United States, the Great Depression began soon after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors ("The Great Depression."). In turn from this single tragic event, numerous amounts of chain reactions occurred.
Everyone has their own political leaning and that leaning comes from one’s opinion about the Government. Peoples’ opinions are formed by what the parties say they will and will not do, the amounts they want spend and what they want to save. In macroeconomic terms, what the government spends is known as fiscal policy. Fiscal policy is the use of taxation and government spending for the purposes of stimulating or slowing down growth in an economy. Fiscal policy can be used for expansionary reasons, which is aimed at growing the economy and increasing employment, or contractionary which is intended to slow the growth of an economy. Expansionary fiscal policy features increased government spending and decreases in the tax rates as where contractionary policy focuses on lowering government spending and increasing tax rates. It must be understood that fiscal policy is meant to help the economy, although some negative results may arise.
Capitalism can be many different things, but it is basically an economic system that is based off
Government policy environment – a desire to reduce unemployment and make the economy attractive to inward investment as a source of employment and long-term growth
The appropriate role of government in the economy consists of six major functions of interventions in the markets economy. Governments provide the legal and social framework, maintain competition, provide public goods and services, national defense, income and social welfare, correct for externalities, and stabilize the economy. The government also provides polices that help support the functioning of markets and policies to correct situations when the market fails. As well as, guiding the overall pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability. By applying the fiscal policy which adjusts spending and tax rates or monetary policy which manage the money supply and control the use of credit, it can slow down or speed up the economy's rate of growth in the process, affecting the level of prices and employment to increase or decrease.
The disparities between the two views of the economy lead to very different policies that have produced contradictory results. The Keynesian theory presents the rational of structuralism as the basis of economic decisions and provides support for government involvement to maintain high levels of employment. The argument runs that people make decisions based on their environments and when investment falls due to structural change, the economy suffers from a recession. The government must act against this movement and increase the level of employment by fiscal injections and training of the labour force. In fact, the government should itself increase hiring in crown corporations. In contrast the Neoliberal theory attributes the self-interest of individuals as the determinant of the level of employment.
Capitalism is the economic system in which production, distribution and, exchange of goods takes place for profit by people's own interest. In capitalism, private owners control over industry or market with none or very low interference by government. Capitalism provides right to express their freedom by making decision about their goods and labor. It gives right or freedom to choose what to produce, how to produce and, price of that product. Producer will decide that for how much he or she wants to sell his or her product. These, exchange of goods, all mainly depend on the laws of supply and demandl If there is no demand for a specific product, that producer won't be able to sell his/her product with profit. In contrast, on high' demand of a product, producer can sell and make a lot of profit. The main principle of the capitalism is to give freedom to the individual for their ability to produce something based on consumer demand and, interest in exchange of goods by means of profit and need. In sHort, people get freedom to run the market based on their ability and interest. In an ideal world, it supposed to benefit everyone, producers and consumers, because producer wilf produce and make profit from what people want and consumer will pay what they think the product is worth for. In Capitalism, private owner's make profit over labor. In-real world, labor get less money for their work on which owner make profit. Capitalism provides us freedom of individual, but it neglects the stability of the society.
The economics, as an independent subject has already existed in this world for a long time. Maybe some people believe that the knowledge which is contained in economics is so far from them that it is not necessary to consider about is. Actually, economics always hides in our daily life and effects decisions what we made. Once I have hold the same opinion of economics is not really my business, but I do not think like this any more after I studied this subject. Economics no longer acts as an abstract terminology lying on the textbook far away from me, this word became meaningful and I am sure it will make some changes not only in my mind, but also in my future life.