Development of Economy for Business | Report

Added on - 02 Feb 2020

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Economics forBusiness
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Use of supply side policies to facilitate economic growth.....................................................1TASK 2............................................................................................................................................5Use of Fiscal and monetary policy to stimulate economic growth........................................5CONCLUSION................................................................................................................................8REFERENCES..............................................................................................................................10
INTRODUCTIONEconomics for business deals with the issues which are having direct or indirect impacton the functioning of corporations or country. A country is affected by many domestic and globalfactors which bring fluctuations in different economic determinants such as price level, inflationrate, interest rates, employment rate and many others (Woodford, 2011). In order to stabilize theeconomy government and other legislative bodies like central banks adopts different measuressuch as supply side policies, fiscal policy and monetary policy. Supply side policies focus on theenhancement of efficiency and productivity of the different sectors of the country, fiscal policy isthe tool adopted by Government to stabilize the economy through making changes in spendingand taxation and monetary policy which is used by central bank is the method through which itregulates the money supply of the country (Gertler and Karadi, 2011). Present report is preparedto elucidate the impact of all the three mentioned tools to bring growth and development of theeconomy.TASK 1Use of supply side policies to facilitate economic growthSupply side policies are the measures adopted by the Government to escalate theproductive efficiency of the economy by focussing on supply side performance. Objectives ofsupply side policies are bringing high economic growth, reducing the inflation rate, loweringdown the unemployment in the country and bringing equilibrium in balance of payments (Galí,2015). It is used by many countries to improve condition, among all UK has been the countrywhich has used it in an integrated manner in wide manner which has benefited in effectivemanner.Objectives of supply side policiesIt focusses on the core economic determinant of the country that is GDP (Gross DomesticProduct). Using supply side policy improves the growth rate of real GDP along withmaintaining the consistency level.It has the prime objective of bringing improvements in the productivity of the factors ofproduction. The fundamental factor of production in a country is the capital and labour.By using different methods and tools the efficiency of capital flow as well the labourproductivity through mobility is increased (Curdia and Woodford, 2010).1
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