Economic Foundation for Public Policy: UK Fiscal Policy Analysis
VerifiedAdded on 2021/09/19
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AI Summary
This report analyzes the economic foundation of public policy, specifically focusing on the UK's expansionary fiscal policy implemented in 2009 during the great recession. The policy aimed to stimulate economic growth and maintain inflation below 2%. The report examines the policy's components, including tax reductions, increased government expenditure, and the resulting budget deficit. It utilizes the Keynesian model to illustrate the impact on economic output, price levels, and unemployment rates. Furthermore, the report presents data on GDP growth, inflation, and unemployment in the UK during the period. It also discusses the role of monetary policy, including interest rate cuts and quantitative easing, and their limitations. The analysis concludes by emphasizing the importance of accurate economic information for effective fiscal policy and the need to consider current economic conditions when implementing such policies.
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