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MACROECONOMICS POLICIES AND INFLATION
This essay talks about the basic macroeconomic policies .e.g. fiscal policy, monetary policy, regional policy etc. it also discusses about inflation stating types of inflation and impacts to the society.
|language || ||english
|wordcount || ||3830 (cca 10 pages)
|contextual quality || ||N/A
|language level || ||N/A
|price || ||free
|sources || ||3
Table of contents
Fiscal policy 1
ii. Monetary policies 2
iii. Direct intervention 2
c. Regional policies 2
Policy conflicts 2
Difficulties in using fiscal policy 3
Problems of prices and Incomes policy 4
Monetary policy 4
6. TYPES AND CAUSES OF INFLATION 5
Causes of Inflation 6
7. THE IMPACT OF INFLATION AND ITS CONTROL MEASURES 8
Preview of the essay: MACROECONOMICS POLICIES AND INFLATION
Refers to the manipulation of government revenue and expenditure to achieve policy objectives associated with:
• Moderating resources allocation and adjusting price mechanisms in favour of the satisfaction of public wants by encouraging socially optimal investments as well as increasing rate of investments;
• Redistributing wealth income;
• Guiding the national economy in terms of growth and stability;
• Increasing employment opportunities;
• Counteracting inflation; and
• Improving the balance of payments.
The usefulness of fiscal policies if often limited by:
• Structural constraints in the economies; and
• Observed conflicts of objectives between long term growth and short term stability; social welfare and economic growth; income distribution and growth and personal freedom and social control.
Basically, fiscal policy can be applied in many ways to influence the economy. For example the government can ...
... viewpoint is to control money supply through setting targets for monetary growth. This could be achieved through what is known s medium term financial strategy (MTFs) which aims to gradually reducing the growth of money in line with the growth of real economy – the use of monetary policy instruments such as the bank rate, open market operations (OMO) and variable reserve requirement (cash & liquidity ratios).
Direct Intervention: Prices and incomes policy: Direct intervention involves fixing wages and prices to ensure there is almost equal rise in wages and other incomes alongside the improvements in productivity in the economy. Nevertheless, these policies become successful for a short period as they end up storing trouble further, once relaxed will lead to frequent price rises and wage fluctuations. Like direct intervention, fiscal and monetary policies may fail if they are relied upon as the only method of controlling inflation, and what is needed is a combination of policies.
Essay is in categories
In the strictest sense, inflation is central to macroeconomic policies. Inflation is a permanent economic phenomenon.