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Fiscal Policy, Budget Deficits and Government Debt
C/E/96. The Use of fiscal policy on inflationary and deflationary gaps. Why do governments prefer to use fiscal policy?
- WORDS:
- 1500
- DATE:
- 2006
- PRICE:
- 19.99 GBP
The essay explains the concept of fiscal and monetary policy in detail, as well as inflationary and deflationary gaps. Detailed explanation is provided on how the fiscal policy can correct both gaps. However, it is later argued that monetary policy also can affect aggregate demand and therefore the lack of its use may be purely traditional. The essay also explores the true ability of the government to use fiscal policy, as some of it is often used for political reasons. Limitations of discretionary fiscal policy are discussed in detail.
KEYWORDS: fiscal, policy, inflationary, deflationary, gaps, governments, prefer, fiscal, policy,
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