Mattingly "AI & Prompt Design: The Basics of Prompt Design"
Economic policies.docx ambot lng ani. (1)
1. ECONOMIC POLICIES: MONETARY POLICY, FOREIGN TRADE POLICY
AND FISCAL POLICY
WRITTEN REPORT OF GROUP 7
IN
Economic, taxation and agrarian reform (subject description)
Members:
Abenoja,jr
Lamay, dave
Pequit, merlkin john
Babad, NiñaVanessa
Bastigue,cristinejoy
Guillena, schera
2.
3. Economicpolicy
-refers to the actions that governments take in the economic field. It covers
the systems for setting levels of:
taxation,
government budgets,
money supply and interest rates
labor market
national ownership, and many other areas of government interventions
into the economy.
4. Monetarypolicy
- is the process by which the monetary authority of a country
controls the value of currency by lowering the supply of money to control
inflation and raising it to stimulate economic growth.
So, this policy is concerned with the amount of money in circulation and,
consequently, interest rates and inflation. Monetary policy has objectives,
types and regulators or regulation that defined how the process will work.
There are two primary objective of monetary policy:
to manage inflation
to reduce unemployment, but only after they have controlled
inflation.
There are TWO BASIC TYPES OF MONETARY POLICY:
Expansionary monetary policy- increases the money supply,
expansionary monetary policy includes purchasing government
bonds, decreasing the reserve requirement, and decreasing the federal
funds interest rate.
Contractionary monetary policy- slows the rate of growth in the
money supply or outright decreases the money supply in order to
control inflation; while sometimes necessary, contractionary monetary
policy can slow economic growth, increase unemployment and depress
borrowing and spending by consumers and businesses.
5. So, let’s move on in the regulators:
Federal Reserve (Fed)- is in charge of monetary policy, and implements it
primarily by performing operations that influence short-term interest rates.
Foreigntradepolicy
-(also referred to as a trade policy or international trade policy) is a set
of rules and regulations that are intended to change international trade flows,
particularly to restrict imports.
-are government actions, especially tariffs, import quotas, and export
subsidies, designed to increase net exports by promoting exports or restricting
imports.
So, in every nation has some form of trade policy in place, with public
officials formulating the policy which they think would be most appropriate
for their country.
The main objectives of the commercial policy are:
to appreciate trade with other nations.
to protect domestic market prevailing in the country.
to increase the export of particular product which will help in
expanding domestic market.
to prevent the imports of particular goods for giving protection to
infant industries or developing key industry or saving foreign
exchange, etc.
to encourage the imports of capital goods for speeding up the
economic development of the country.
to restrict the imports of goods which create unfavourable balance of
payments.
6. to assist or prevent the export or import of goods and services for
achieving the desired rate of exchange.
to enter into trade agreements with foreign nations for stabilizing the
foreign trade.
So, the purposed of this policy is to help a nation's international trade run
more smoothly, by setting clear standards and goals which can be understood
by potential trading partners. In many regions, groups of nations work
together to create mutually beneficial trade policies.
There are three most common foreign trade barriers are:
Tariffs- are simply taxes placed on imports. They work like any other taxes.
A tariff is added to the price of the imported good. The resulting price of the
import is thus higher, which tends to decrease the quantity purchased. And if
fewer imports are purchased, then more domestic production is sold.
Import quotas- the second of three foreign trade policies designed to restrict
imports and promote exports is quotas on imports. In general, a quota is
simply a quantity restriction placed on a good, service, or activity. For
example, employers often face hiring quotas for different demographic
groups and sales representatives often have quotas for sales activities.
Export Subsidies- The third of three common foreign trade policies is export
subsidies. In general, a subsidy is a payment made by the government sector,
either to a business or consumer, with no expectations of receiving any
production in exchange. That is, subsidies are merely gifts. They are also
commonly thought of as negative taxes.
7. FISCALPOLICY
-uses tax and spending changes to impact the economy. So, it means
the government adjusts its spending levels and tax rates to monitor and
influence a nation's economy. It is the sister strategy to
monetary policy through which a central bank influences a nation's money
supply.
Federal budget is the primary spending mechanism, and the primary means for
funding the budget is taxation.
Two main types of fiscal policy:
Expansionary- is a form of fiscal policy that involves decreasing
taxes, increasing government expenditures or both in order to fight
recessionary pressures. A decrease in taxes means that households have
more disposal income to spend. Higher disposal income increases
consumption which increases GDP
Contractionary fiscal policy- is a form of fiscal policy that involves
increasing taxes, decreasing government expenditures or both in order
to fight inflationary pressures. Due to an increase in taxes, households
have less disposal income to spend. Lower disposal income decreases
consumption.