Fiscal Policy | Economics Assignment

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
Name of the Student
Name of the University
Author Note

ECONOMICS ASSIGNMENT
1
Table of Contents
Answer to question C.i....................................................................................................................2
Answer to question C.ii...................................................................................................................3
Answer to question C.iii..................................................................................................................5
Reference list...................................................................................................................................6

ECONOMICS ASSIGNMENT
2
Answer to question C.i
Prospects of fiscal policy: According to data, the UK economy has been experiencing a
downward trend in the RGDP growth. Within last on year, the RGDP growth has been slashed
down to 1.24% from 1.39%. Looking forward, the economy is expecting further deterioration in
the country’s total output level in the upcoming years. In order to overcome this sluggish
economic progress, the UK government must emphasize on the fiscal policy which deals with
public expenditure and tax system. Most of the government expenditure in UK has been reported
to allocate for the unproductive activity including defense spending as well as governmental aid
to other nations. As a result of that, the growing fiscal expenditure has aggravated the fiscal
deficit condition instead of improving the economic condition of the UK. In this regard, the
expansionary fiscal policy is expected to yield most effective outcome for the ailing UK
economy (Bhattarai, Haughton and Tuerck 2015). The expansionary fiscal policy calls for the
enhancement in the government expenditure in terms of welfare subsidy or monetary assistance
to the general public. The beneficial impact of this policy will be consumed by all people staying
in the UK economy. Most importantly, it accelerates the structural development process which
can lead the country to gain a sustainable economic growth.
Prospects of monetary policy: The UK economy has been observing dwindling economic
performance due to the cumulative effect of global economy, uncertainty in the Brexit agreement
and impoverished structural development of the national economy. An appropriate economic
policy needs to be implemented in order to boost the aggregate demand of the UK economy. The
improvement in the cumulative demand will likely to bring immediate impact on the country’s
aggregate output level (Bhattarai and Trzeciakiewicz 2017). In respect of UK economy, the
expansionary monetary policy should be incorporated to augment the purchasing power of the