Global Macroeconomic Policy: Explaining Monetary and Fiscal Policy Implementation and Their Influence on GDP and Price Level

Global Macroeconomic
Policies

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Explaining how monetary and fiscal policy is implemented addition to how they can be used
to influence price level and GDP.................................................................................................1
Whether fiscal policy will remain key policy instrument in sorts of countries in near future....4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
At global level, macroeconomic policy is said to a policy which supports objectives of
economy including minimising unemployment, controlling inflation and stable economic growth
across worldwide. It aims to maximise national level income, living standards of participants and
provide growth to raise utility. It majorly looks towards performance of economies with sound
instruments (Ahn, Duval and Sever, 2020). The world has entered in a new era of rapid change
driven through shifts in demographics, technology and wealth. There are two instruments of
macroeconomic policy that are named as fiscal policy as well as monetary policy. The project is
prepared to gain insight about instruments of global macroeconomic policy.
The assessment highlights how implementation of monetary policy and fiscal policy is done
as well as and how they influence GDP and Price level in an economy. It also explains whether
fiscal policy will remain major instrument of the policy in UK in near future.
MAIN BODY
Explaining how monetary and fiscal policy is implemented addition to how they can be used to
influence price level and GDP
Monetary and fiscal policy are government macroeconomic policies that are used for raising
aggregating demand so to enhance economic growth across globe. Monetary policy comprises
changes in supply of money, interest rate and exchange rate. It is amended for providing a
statutory basis to execute flexible inflation targeting model or framework. It entails action of
central banks to impact effectively on monetary addition to financial situations with the objective
of achieving wider macroeconomic policy goals that are sustainable economic growth together
with low inflation (Edo, Matthew and Ogunrinola, 2020). For instance, at central bank of UK,
two monetary policy tools are used to attain macroeconomic policy objectives. First includes
setting interest rate which central bank charge banks to borrow money which is Bank Rate.
Another is, purchasing bonds to lower rates of interests in savings addition to loans by
quantitative easing. It is formulated and implemented on the basis of inputs collected from
multiple sources. Monetary authority looks towards macroeconomic numbers including GDP,
inflation, industrial growth rate and geopolitical developments in global markets comprising
trade tariffs. Bank of England implement monetary policy with the goal of keeping long term
rates of interest relatively low. Core role in this is to act as lender of last resort, providing
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