Importance of Expansionary Monetary and Fiscal Policies in Advanced Economics

IFY ADVANCED
ECONOMICS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Advanced economics is usually termed as having higher extent of per capita
income, export base and financial sector which integrated into global financial system.
The consumer and business confidential aspects are impacted by pandemic which has
reduced aggregate demand. The policies such as expansionary monetary and fiscal are
concerned with such aspect whereby country need to adopt these to improve their
economical aspects. In this essay it would be discussing about similar concern that will
state how such policies are beneficial for economy as whole. The major role and
change it can bring into existing economy of specific country. Furthermore, majorly it will
cover which policy is most significant for chosen country.
MAIN BODY
The importance of policies in economy
The economic decisions could have the most significant impact towards
economy. In the context of household the decisions which is made by them could reflect
over consume more and save less leading towards enhancement in investment,
employment and profits. In equal terms decisions that are formed by corporations could
have essential impact to corporate profit and real economy (Twinoburyo and Odhiambo,
2018). Individual corporations can impact over large economies by itself such as
decision of individual household concerned with consumption have minimal impact on
broad economy. In contrast, as decisions formed by government could have
tremendous impact to huge and formulated economy for two major concerns. Firstly,
there is public sector for formulated economies which employ vital proportion of
population, and they are accountable for spending for the same in economy. Secondly,
governments in these measures are known as highest borrowers within world debt
markets. Governments in this phase encourage performance of economy through
utilizing collaborations of fiscal and monetary policy. The amount of wealth which citizen
of economy select to bear up in terms of money as opposed to equities and bonds and
it is stated as demand for money. In this case there are three main motives for holding
money such as speculative, precautionary, and transaction related.
Expansionary monetary policy refers to the process in which the central banks
form and manages and the policy is further concerned by management of interest rates