Economics: Impact of Protectionism Policies, Emerging Economies, and Fiscal and Monetary Policies

This document discusses the impact of protectionism policies on the global trade war, emerging economies, and fiscal and monetary policies for achieving economic stability. It covers topics such as the impact of tariffs on aluminum and steel, emerging economies like China and South Korea, and the use of fiscal and monetary policies for economic stability. The document also includes a reference list for further reading.

Running head: ECONOMICS
ECONOMICS
Name of the student
Name of the university
Author note

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Table of Contents
Answer b....................................................................................................................................2
Answer c.....................................................................................................................................3
Answer d....................................................................................................................................4
Reference list..............................................................................................................................7

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Answer b
The president of the United States known to have imposed huge tariffs on aluminum
and steel from the European Union. Donald Trump has known to put huge amount of tariffs
on billions of dollars of goods from the European union, china, Mexico and Canada. He had
put tariff on the products that are made abroad where they had placed tariffs on the billions of
worth of goods particularly in china. The global trade war will be hurting the consumers
around the world by making it quite hard for the companies for operating and this will force
them to push higher prices on their consumers. The protectionist policies will be forcing the
Europeans to face the unsettling problems of the huge current account surplus. This has
resulted in the rise of trade tensions between the United States and China (Lee 2018). The
Central Bank of Europe will also put high tariffs on the goods of the United States. The
import of the heavy economy from the United Kingdom will be more resilient to the impact
of tariffs than the countries such as China and Germany who known to have exported more
goods than they imports. There will be negative impact on the stock markets. When trump
will be imposing tariffs on the steel, tariff will not only affect the steel sector of the United
Kingdom but also the economy of the United States. The tariffs will make steel and
aluminum from the United Kingdom much more expensive in the United States which will be
declining the demand and that will be also affecting the thousands of jobs. Trump also
imposed tariffs on national security grounds which will threaten the American steel and
aluminum producers. The tariff can make every day items to be more expensive in nature that
will be making it more expensive for the people of United Kingdom with the rise in the
import prices. Trump have known to place huge amount of tariffs on the Chinese products for
punish the country for years of practicing unfair trading practices which also includes stealing
of the American intellectual property for the benefit of the economy (Lee 2018). The US-

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Mexico-Canada Agreement and the pending US-Europe trade deal will also result in slight
economic downturn. The protectionism is the practice of following the protectionist trade
policies. The protectionist trade policy will be allowing the government for promoting the
domestic producers and will also help in boosting the domestic production of the goods and
services by imposing taxes on the foreign goods. Trump’s protectionism policies will lead to
economic insolation which can also lead to political and cultural isolation. As a result of the
huge amount of tariffs there will be also limited choice for the consumers along with
stagnation of the technological advancements.
Answer c
The emerging economies are those countries which possess the characteristics of the
developed market although does not satisfy the standards to be termed as the developed
markets. However, these countries might become developed in the future. Some of the
emerging economies are China, South Korea, Peru and Malaysia. The rapidly and volatile
economies of Asian countries. The economies will be having a huge potential for growth. The
emerging market economy is that economy in which the country is becoming a developed
nation and determined through socio economic factors. When the emerging economies will
be in progress they will be experiencing any kind of rapid growth they set out to create. The
emerging markets have begun to drive from global innovation. The potential for the growth
in the emerging markets comes with the own sets of the risks. The emerging and the growth
leading economies will be emerging markets that have been developed. The emerging market
is known as that country that have the characteristics of the developed market although does
not satisfy the standards. Economies of china and India are considered as one of the largest
emerging markets. The demand for the products or the services in the emerging markets
always remain high and the developing economies can be complex in nature. The emerging
economies have accounted for more than two third of the gross domestic product of the world

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and more ta half of the new consumption will be there over the years. In the year 2015 the
emerging markets were known to be the home for more than one billion internet users.
Therefore, it can be said that the emerging markets are a requirement or the global retail
leadership. It have been also been predicted that by the year of 2020, large number of
consumers in the emerging markets will be crossing the annual household. The size of the
global business is also expected to generate double digit growth before 2020. One of the most
important characteristics of the emerging markets is that they are the stage of economic
maturation and development of the free markets. The attractive environment for the foreign
investo9rs and the global trading have been created based on this particular characteristics.
The emerging market country can be defined as the society which is transforming to the
market oriented economy. There will be a presence of gradual integration in the global
marketplace with the expanding middle class, improving the standards of living and social
stability and tolerance and increasing the cooperation with those institutions.
Answer d
The government will be using the fiscal and monetary policies for achieving the
economic stability which suggests that will be helping in achieving the high economic
growth, controlling inflation long with the full employment of the economic factors.
The fiscal policy can be defined as those tools which the government will be using for
achieving the economic objectives. These particular tools are generally used by the
government in the form of spending and taxes. The fiscal policy will be achieving several
objective3s of the government. One of the main objective of the fiscal policy is that it will be
helping in achieving through balancing between the aggregate demand and supply for
avoiding the inflation (Ghosh, Ostry and Chamon 2016). Therefore, it can be said that fiscal
policy will help in changing the spending of the government and taxation in order to

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influence the aggregate demand. For increasing aggregate demand in the economy the
government will be helping to increase the government spending and lower the tax. When the
government will want to decrease the aggregate demand they will be decreasing the
government spending and also increase taxation. These policies will be affecting the overall
businesss sectors in two dimensions which are the general legislation and the targeted
legislation. When there will be recession in the economy, the government will be using the
expansionary fiscal policies by incre3asing the government spending and decreasing the tax.
Rise in the government spending will he4lp in creation of money in the economy and will
also help in creation of jobs. It will help in creating economic growth. By decreasing the
taxes it will help in increase in the purchasing power of the people which in return will help
in increasing the demand in the economy.
The monetary policy is generally used by b the cen6yral banks and the government
for encouraging the growth in the economy and also help in discouraging the growth rate for
avoiding any kind of economic issues such as inflation. When there will be recession in the
economy the government will be using expansionary monetary policies by buying
government bonds and lowering the interest rates. The money supply will be increasing in
the economy and the rate of unemployment will be declaring. This will also help in
stimulating the borrowing as well as spending in the economy. In case of the developed
countries the government will be decreasing the supply of money by using various
contractionary , monetary policies where the government will be selling bonds in order to
raise the inte3rest rates or even raise the reserve ratio (Ghosh, Ostry and Chamon 2016). The
monetary policy can help is using the economic issues such as inflation in the economy.
Both the policies help in achieving the economic stability. The player of the fiscal policy is
the government and on the other hand the player of the monetary policy is the central bank.

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An example can be stated where the Economic Stimulus Act had been taken in 2008
where the government boosted the economy by sending the taxpayers an amount of $600
depending upon their marital status d the number of dependents. . Tax cuts are favoured by
conservatives for effective expansionary fiscal policy.

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Reference list
Ahmed, S., Coulibaly, B. and Zlate, A., 2017. International financial spillovers to emerging
market economies: How important are economic fundamentals?. Journal of International
Money and Finance, 76, pp.133-152.
Bianchi, F. and Ilut, C., 2017. Monetary/fiscal policy mix and agents' beliefs. Review of
economic Dynamics, 26, pp.113-139.
Gay, R.D., 2016. Effect of macroeconomic variables on stock market returns for four
emerging economies: Brazil, Russia, India, and China. The International Business &
Economics Research Journal (Online), 15(3), p.119.
Gereffi, G., 2017. Trump’s protectionism and its impact on global value chains.
Ghosh, A.R., Ostry, J.D. and Chamon, M., 2016. Two targets, two instruments: monetary and
exchange rate policies in emerging market economies. Journal of International Money and
Finance, 60, pp.172-196.
Irwin, D.A., 2017. The False Promise of Protectionism: Why Trump's Trade Policy Could
Backfire. Foreign Aff., 96, p.45.
Lee, S.H., 2018. Trump’s Protectionism: What Future for US Trade Policy?.
Mallick, A. and Sethi, N., 2016. Interaction between Monetary and Fiscal Policy: Empirical
Evidence from India. PRAGATI: Journal of Indian Economy, 3(2), pp.1-15.
Nakamura, E. and Steinsson, J., 2015. Assessing the effects of monetary and fiscal policy.
NBER Reporter, (1), pp.22-25.

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Rafiq, S., Salim, R. and Nielsen, I., 2016. Urbanization, openness, emissions, and energy
intensity: a study of increasingly urbanized emerging economies. Energy Economics, 56,
pp.20-28.
Smets, F., 2018. Monetary and Fiscal Policy Interactions and the Labor Market. International
Journal of Central Banking.