How do government policies and/or regulations factor into changes in economic activity on both a domestic and global scale? Give a specific example of a policy or regulation that has helped economic activity. Give a specific example of a policy or regulation that has hindered economic activity. If you were an economist who was tasked with evaluating this policy or regulation, what are some ideas you would suggest for changing it in a way that would achieve the same goal but not hinder economic activity? Finally, state whether or not you enjoy these types of evaluations and if you would consider these types of responsibilities in a future career. Solution Monetary policy is by far the most powerful weapon in the government’s arsenal. Unfortunately, it is also the most imprecise. The government can do some fine control with tax policy to move capital between investments by granting favorable tax status On the whole, governments tend to go for large, sweeping changes by altering the monetary landscape. Governments are the only entities that can legally create their respective currencies. Interest rates are another popular weapon, even though they are often used to counteract inflation. They can spur the economy separately from inflation. Pumping in money feels good for a while, especially for investors who see corporate profits and share prices shooting up, but the long-term impact is an erosion of value across the board. Savings are worth less, punishing savers and bond buyers Government programs provide valuable \"public goods\" such as education and infrastructure. Inreases in government spending can bolster economic growth by putting money into people\'s pockets. I believe the policy of QE (quantiative easing) during times of recession to bring back a shattered economy in place. An automatic reversal will never happen, and it is imperative on the part of government is follow such prudent measures. I would consider these types of responsibilites in a long-term perspective. *****.

1. How do government policies and/or regulations factor into changes in economic activity on both
a domestic and global scale?
Give a specific example of a policy or regulation that has helped economic activity.
Give a specific example of a policy or regulation that has hindered economic activity.
If you were an economist who was tasked with evaluating this policy or regulation, what are
some ideas you would suggest for changing it in a way that would achieve the same goal but not
hinder economic activity?
Finally, state whether or not you enjoy these types of evaluations and if you would consider
these types of responsibilities in a future career.
Solution
Monetary policy is by far the most powerful weapon in the government’s arsenal. Unfortunately,
it is also the most imprecise. The government can do some fine control with tax policy to move
capital between investments by granting favorable tax status On the whole, governments tend to
go for large, sweeping changes by altering the monetary landscape. Governments are the only
entities that can legally create their respective currencies. Interest rates are another popular
weapon, even though they are often used to counteract inflation. They can spur the economy
separately from inflation.
Pumping in money feels good for a while, especially for investors who see corporate profits and
share prices shooting up, but the long-term impact is an erosion of value across the board.
Savings are worth less, punishing savers and bond buyers
Government programs provide valuable "public goods" such as education and infrastructure.
Inreases in government spending can bolster economic growth by putting money into people's
pockets.
I believe the policy of QE (quantiative easing) during times of recession to bring back a shattered
economy in place. An automatic reversal will never happen, and it is imperative on the part of
government is follow such prudent measures. I would consider these types of responsibilites in a
long-term perspective.
*****