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Fiscal Policy and its Implementation in Singapore in 2020

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Added on  2020-10-01

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This article explains discretionary and automatic stabilizer fiscal policies and how Singapore implemented expansionary fiscal policy in 2020. It also discusses the advantages of fiscal policy in Singapore, including the decline in bankruptcy rates, maintenance or increase in the power of consumption, and the ability to solve the issue of unemployment rate and boost economic growth.

Fiscal Policy and its Implementation in Singapore in 2020

   Added on 2020-10-01

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Sarawak Campus Faculty of Business, Design and Arts Higher Education Division Group Assignment: Fiscal PolicyECO 20004 Macroeconomic PolicySemester 1, 2020
Fiscal Policy and its Implementation in Singapore in 2020_1
1.Explain (i) discretionary fiscal policy, and (ii) automatic stabilizer Discretionary fiscal policy is a type of transform in government spending or taxes. They are thebudget process and the tax code. Discretionary fiscal policy refers to the sudden imposition of newtaxes or changes in their rates, or on how government spend their revenue. Discretionary fiscalpolicy consists of neutral fiscal policy, expansionary fiscal policy and contractionary fiscal policy.The discretionary fiscal policy can figure out by the aggregate demand (AD), thus increaseaggregate demand and output. Discretionary fiscal policy will benefit in narrow the deflation gap.Deflationary gap led to a recession in output, income and employment rate as well as persistent fallin prices. Discretionary fiscal policy differs from automatic fiscal stabilizers.Automatic stabilizers are fiscal policy which able to equalize the economic activity’s undulationwithout timely and additional authorization by policymakers and government actions. Itautomatically restructures transfer payments and tax rate which object to stabilize spending,income, and consumption over the business cycle.In the short-term or long-term economic decline, automatic stabilizers help the overalleconomy by stimulating aggregate demand. During a recession, government spending increasesautomatically due to public claim unemployment benefits. When the economy back to equilibrium,automatic stabilizer will turn-off and phase-down.200 words
Fiscal Policy and its Implementation in Singapore in 2020_2

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