Macroeconomic Policy Assignment Report

Running head: MACROEONOMIC POLICY
MACROECONOMIC POLICY
Name of the Student
Name of the University
Author Note

1
MACROECONOMIC POLICY
Introduction
Macroeconomics is a branch of economics that is related to the entire functioning
related to the economy. Policies of macroeconomics are crucial and shape the criteria within
which factor as well as product market operate. There are three pillars of macroeconomic
policy-fiscal policy, the policy of exchange rate and monetary policy. The primary aim of the
essay is to discuss how macroeconomic policy creates economic welfare and how far the
government has been successful by applying the above policy.
Discussion
The government can influence the growth in the economy by fiscal and monetary
policy that are aspects of the macroeconomy. For the economic growth to be encouraged, the
government may reduce the rate of interest and on the other hand, increase financial supply;
however, this might lead to inflation. Through macroeconomic policy, the government can
create more jobs and improve the standards of living that will bring economic welfare in the
nation (Fuchs and Hassan 2016). Through capital expenditure, the government can influence
economic activity. Change in cash rate can increase savings as well as investment behaviour,
personal spending and credit supply. Macroeconomics is essential in evaluating the entire
performance of the economy regarding national income (Hope and Soskice 2016). By
creating employment benefits, stable prices, equal distribution of wealth and others will help
the government to achieve economic welfare.
The government has been quite successful in increasing economic welfare by
applying the above policy. Its policies have been successful in reducing poverty and also
stabilized the economic cycle. The macroeconomic policy encourages investment in private
sector privatizations, liberations in trade, financial as well as banking reforms that helps in
reducing the poverty of the nation. It also promotes stability in the economic cycle by