Supply Side Fiscal Policy: The fiscal policy can also influence the level of economic activity through there cost on aggregate supply. ==>When the firms experience the increase in resource costs, due to sharp rise in world price of major raw-material e.g. Oil ==>Higher cost causes a decrease in an aggregate supply thus creating a recessionary gap therefore expansionary fiscal policy in the form of reduced corporate tax and pay role tax can help in reducing the recessionary gap==>And in case of Inflationary gap taxes are increased...
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Unemployment Compensation: During Boom years unemployment reserve fund grows and exerts stabilizing pressure against too great spending ==>On the contrary during years of slack employment the reserve funds are used to pay out income to sustain consumption and moderate the decline. 5. Form Aid Program: Form Aid Program are used when the prices of agriculture goods are falling and the economy is threaten with depression the government purchases the surplus products of the farmers at set price which will stabilize the economy and fade off depression...
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Monetary Policy It consists of buying and selling government bonds from and to commercial banks and the general public. The U.S. Federal Reserve said on Friday (November 30, 2007) it added $6...	4 / 1066
Tools of Monetary Policy Bank representatives no longer have to go to the "discount window" to receive a loan. In this technological age, the Federal Reserve process most transactions electronically by telephone and computer (Federal Reserve Bank of Richmond, 2006)...	3 / 687
Macroeconomics Impact on Business Operations The monetary multiplier is the reciprocal of $0.20 therefore is equal to 5. By multiplying 5 by the excess reserve $80 the maximum checkable deposit through lending is calculated to be $400...	6 / 1486
Macroeconomics Reserve requirements are the percentages of precise kinds of deposits that banks must keep in their vaults or deposit at a Federal Reserve Bank. Banks and other institutions keep a certain amount of funds in reserve to meet unforeseen outflows...	1 / 261