Bus 1104 unit 5 WA - Macroeconomics deals with how the unlimited resources of a nation are distributed PDF

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Macroeconomics deals with how the unlimited resources of a nation are distributed...

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Fiscal policy refers to the use of government spending and tax policies to influence economics conditions, especially macroeconomics conditions, including aggregate demand for goods and services, employment, inflation, and economic growth.

Kelly (2020) defines economic stimulus as the government's use of targeted, expansionary monetary or fiscal policies focused on Keynesian economic ideas to stimulate private sector economic development.

I currently live in Nigeria. As a Nigerian, my country really need an economy stimulus and they are ways to achieve that, which includes

Government purchases: The government purchases component of aggregate demand includes all purchases by government agencies of goods and services produced by firms, as well as direct production by government agencies themselves. I believe that if the government make more purchases of goods and services produced by firms and government agencies, it will help the increase in income in the economy and increases consumption. When government spent resources on amenities such as education, transportation, and other amenities, it will help stabilize the GDP of it country.

Business Taxes: is defined as a policy that allows a company to reduce its tax liability by a percentage of Fiscal Policies the investment it makes at a given time. (Rittenberg & Tregarthen, 2012). If the government lowers business taxes, disposable income will rise, resulting in more funding available for firms to invest in their businesses. As a result, firms will be able to continue operating despite the Covid-19 pandemic, and the unemployment rate will not rise due to layoffs because most company and businesses were affected by the COVID-19 and by doing this, it will help stabilize the economy.

Income Taxes: An increase in income taxes reduces disposable personal income and thus reduces consumption while a reduction in income taxes increases disposable personal income, increases consumption. (Rittenberg & Tregarthen, 2012). In this current situation where people are finding it difficult to survive in Nigeria, i will urge the government to reduce income taxes to ease things for the people due to the hardship and the struggles the Covid-19 virus and the inflation in the country has caused. Decrease in income taxes will result in increases in disposable income any increase in consumption of goods and services.

Transfer Payments: is defined as government payments to individuals through social programs such as welfare, student grants, and even Social Security that do not affect real GDP (Segal, 2020).

Changes in transfer payments, such as supplying small business owners with grants without collateral that can be used to hire new employees, can help reduce unemployment.\

In conclusion, if Nigeria implemented all these policies, unemployment would decrease, households would spend more on goods and services, while firms would invest, hire more employees, and increase production. As a result, the Nigeria real GDP would increase.

Reference: Rittenberg, L., & Tregarthen, T. D. (2012). Principles of Macroeconomics v. 2.0. Creative Commons License. https://open.lib.umn.edu/macroeconomics/chapter/12-2-the-use-of-fiscal-policy-to-stabilize-theeconomy/

Kelly R.C. (Nov 25 2020). Economic stimulus. Investopedia. https://www.investopedia.com/terms/e/economic-stimulus.asp

Segal, T. (2020, November 25). Transfer payment. Investopedia. https://www.investopedia.com/terms/t/transferpayment.asp...