It is the role of every government to safeguard its people in all matters including controlling the economy. Every economy faces different challenges including the business cycles that may emanate from the global market. In this paper we try to examine measures taken by the UK’s coalition government in trying to ensure that the economy benefits every citizen and reduces the overall burden to it. We consider the recent comprehensive review on spending. Many countries in the world have been suffering a recession in their economies and UK has not been an exception. A recession is a macroeconomic term describing one of the two business cycles that economies go through. The business cycles is characterized by either a boom where there are more business activities carried with a rapid economic growth and points of recession where there is retardation min economic growth. Various aspects and factors contribute to economic growth, which is measured through GDP. This factor may include savings, investments government spending plus other factors within either an increase or a decrease. Reduction in spending may lead to a recession while a n increase in spending may lead to expansion that is a boom in the economy. According to Maynard, John (1930), various measured may be taken by government in order to improve the state of the economy and probably move the economy from a recession or even speed this process. Various players can play a role in improving the economic though as Keynesian theory explains the government plays a great role in this compared to other players like the private sector. The government can therefore use various measures through its budgeting policies, fiscal policies and monetary policies by the Central Bank. It’s on this basis that the UK coalition government has proposed slashing of its budget to reduce the overall spending in the economy. Taxpayer isn't a “first-time homebuyer” with respect to that purchasing a new home unless he or she delays the purchase until the three-year period since his previous home ownership has ended. An individual whose principal residence is in rented quarters (and has been for at least three years) but who owns a vacation home can qualify as a first-time homeowner, because he has had no ownership interest in his principal residence. The Committee Report adds that the individual must not have had an ownership interest in a principle residence in the UK during the three-year period before the purchase of the home to which the credit applies.
Austerity: The History of a Dangerous Idea was written by Mark Blyth, and published by the Oxford University Press in 2013. The text conceptualizes the theory of austerity, and provides countless scenarios in which austerity has failed to combat inauspicious economic conditions, for example, the Great Depression of the 1930’s, and the Great Recession of 2007. Austerity is a fiscal policy mechanism used by governments during business cycle contractions to reduce government deficits, usually by increasing taxes, reducing government expenditure or a combination of both tactics.
By definition, an economic depression is a “sustained, long-term downturn in economic activity in one or more economies.” (http://en.wikipedia.org/wiki/Economic_depression) The latter, is far worse then a recession. A recession is merely an economic slowdown, which was experienced by most Atlantic Provinces in the late 19th century.
A balanced stance on fiscal policy was targeted by the Government in response to the global recession between short and long-term policies. These measures involved bonus payments to low and middle-income Australians to insta...
...rall due to the level of consensus there is relatively little difference between the way the economy has panned out between the conservatives period in charge end the dominance that the Labour party currently are enjoying. On the whole the economy has become relatively depoliticised since the Thatcher years as politicians have less control over this increasingly globalised and privatised aspect of the agenda. Now with Brown’s decision to give the Bank of England the power to set the level of interest rates the economy has become less prone to state intervention then ever especially with a clear end to the grip that Trade Unions once had over the Labour party. Overall state intervention over this period has decreased and barring a crisis it is likely that this will remain the case unless the Liberal Democrats manage to gain power, even through a coalition government.
America will face hardship in our future again, that is inevitable. The way we deal with those problems is what will separate us from the rest of the competition. Because we have dealt with so many problems in our past especially big ones like the Civil War our country has become stronger and when we need advice or need to learn new strategies of the leaders of the past they can turn to Abraham Lincoln and learn of the incredible accomplishments he made as the president and leader of the UNITED States of
We the consumer would rather pay less for any product that is needed or want. Ultimately we are the reason for high prices as well as low prices. Prices of products do not always stay the same and more popular products have higher prices than less popular products. These fluctuations, high prices and low prices are from the idea of supply and demand. Supply and demand defines the effect that the availability of a particular product and the desire or demand for that product has on price. Generally, if there is a low supply and a high demand, the price will be high (Investopedia). To understand the idea of supply and demand, the understanding of supply and the understanding of demand must be defined. The Law of Supply states that at higher prices, producers are willing to offer more products for sale than at lower prices, also that the supply increases as prices increase and decreases as prices decrease (Curriculum Link). The Law of Demand states people will buy more of a product at a lower price than at a higher price, if nothing changes, at a lower price, more people can afford to buy more goods and more of an item more frequently, than they can at a higher price and that at lower prices, people tend to buy some goods as a substitute for others more expensive (Curriculum Link). In todays economics these ideas are seen frequently in everyday life. The laws of supply and demand are seen in many ways in the company Apple Inc. Each year Apple Inc unveils a long awaited mobile operating system and IPhone. We can also see many aspects of the law of supply and demand in Nike Inc’s Jordan Brand. Jordan Brand has released a number of...
I believe that it's’ important to use our constitution as a guiding tool to help appoint the correct people for the job.John Maynard Keynes was a British economist where he fundamentally changed the theory and practices of macroeconomics and economic policies of government. Although he was revolutionary most of his policies were controversial and used Keynesianism economic to get people to stay away from them . His approach to macroeconomic management was different since the previous traditional laissez-faire economists believed that an economy would automatically correct its imbalances and move toward a state of equilibrium, They expected the dynamics of supply and demand to help the economy adjust to recession and inflation without government action. Laissez-faire economics thus regarded layoffs, bankruptcies and downturns in the economy not as something to be avoided but as elements of a natural process that would eventually improve. However that was not the case for the great depression. Keynes also believed that a given level of demand in an economy would produce employment however he insisted that low employment during the depression resulted from inadequate
Government spending is a highly debated topic as to how much money should be spent and how it should be spent, but the fact remains government spending is rising each year and will become unsustainable in the future without major changes. Government spending is currently around 40% of GDP as compared to 7% at the start of the twentieth century (Chantrill, NP). Government spending has had ebbs and flows that can be traced since the start of the twentieth century, which include two world wars and a great depression. However, from the 1980’s through the early 2000’s government spending was lower to mid 30% range of GDP (Chantrill, NP). Increase in spending has been seen since the stock market crash of 2008, to the current levels of around 40% of GDP (Chantrill, NP). Various reasons are behind the major increases of government spending, but the “...
The Classical economists believe that these are “temporary” changes that will correct themselves in the long run. They feel that an economy will always tend towards operating at its potential output (as given by the long-run aggregate supply curve. Nothing needs to be done by the government because normal market forces will serve to self-correct these issues. On the other hand, Keynesian economics argue that the gap between the lower and the potential levels of output is due to a change in aggregate demand. They argue that this gap can exist for a long time and that the gap can be pushed to close faster if the government enacts fiscal and monetary policies. There are differences in how each policy works to close the recessionary gap caused by a drop in aggregate
Global recessions of 1975, 1982, 1991 and 2009 have questioned economists of the specific era to provide the causes of these recessions along with steps to avoid them. IMF considers global recession as “A decline in annual per capita real World GDP (purchasing power parity weighted), backed up by a decline or worsening for one or more of the seven other global macroeconomic indicators: Industrial production, trade, capital flows, oil consumption, unemployment rate, per capita investment, and per capita consumption” (World Economic and Financial Surveys). A recession therefore affects all the countries dependent on an economy undergoing recession. Since decades economists are trying to draft possible measures that an economy can take to avoid recession or to get out of a recession. Constant debates, on which approach an economy should take to get out of recession, have never reached to any conclusion. Mainly there are three schools of thought in economics that emerged during and after recession i.e. classical, monetarist and Keynesian. No school of thought has yet provided a perfect solution as the approaches by these three schools have many pros and cons. However, many economists believe that Keynesian is a more suitable approach for getting an economy out of recession. Although Keynesian approach have policy lags and can cause high inflation, however, Keynesian tools’ expansionary fiscal policy, expansionary monetary policy and revaluation of currency are very effective in increasing GDP ultimately pulling an economy out of recession.
An economic recession is when spending slows down due to less money and jobs. At a certain point, the government would have to step in and implement expansionary economic policies. One action the government would take would include conducting expansionary fiscal policy, the other, expansionary monetary policy involving the Federal Reserve Bank, both of which effect the money supply, spending, interest rates, aggregate demand, GDP, and employment(Amacher & Pate, 2012).
There are many debates concerning macroeconomic policies and how they can help prevent present and future economic issues. Over the years, the government has encountered major recessions such as the Great Depression in the 1930’s and in the 2000’s. Economists were able to help the economy grow by finding solutions to increase government spending and balancing government budget. These solutions helped fight recessions. In this essay, I will discuss the increased government spending to fight recessions and balanced government budget. I will discuss both the advocates’ and critics’ position. I will also state the position in which I support and defend that position.
Difficulties in Formulating Macroeconomic Policy Policy makers try to influence the behaviour of broad economic aggregates in order to improve the performance of the economy. The main macroeconomic objectives of policy are: a high and relatively stable level of employment; a stable general price level; a growing level of real income (economic growth); balance of payments equilibrium, and certain distributional aims. This essay will go through what these difficulties are and examine how these difficulties affect the policy maker when they attempt to formulate macroeconomic policy. It is difficult to provide a single decisive factor for policy evaluation as a change in political and/or economic circumstances may result in declared objectives being changed or reversed. Economists can give advice on the feasibility and desirability of policies designed to attain the ultimate targets, however, the ultimate responsibility lies with the policy maker.
Economics is basically the understanding of how different economies function. Economics is the study of how to best allocate scarce resources among competing uses. Scarcity in the economy is the main problem. There are not enough resources to keep up with the demand for them. Within the discipline of economics, there are two areas of study: Micro and Macro Economics.
What is Microeconomics? This question was left unanswered when I initially enrolled in this course. Microeconomics is the social science that studies the implications of individual human actions, specifically about how those decisions affect the utilization and distribution of scarce resources. Microeconomics shows how and why different goods have different values, how individuals create more efficient or more productive decisions, and how individuals best coordinate and cooperate with one another. Microeconomics does not try to explain what should happen in a market, but instead only explains what to expect if certain conditions change. For instance, If the price of the new iPhone 8 is higher than the previous model will the consumer buy it? There are several elements that will play into getting an answer for this question, but gives you a general idea of what microeconomics entails.