Impact of Fiscal Policy on Business Administration: A Report

This report examines the impact of fiscal policy on business administration, focusing on a specific case study involving a 35-day federal government shutdown and a subsequent tax cut in 2018. The assignment explores how these fiscal policies, including expansionary measures like increased public spending, influenced the GDP and economic growth. The analysis highlights the consequences of these policies, particularly the negative impact on the overall GDP due to increased spending and budget deficits. The report references relevant sources to support its findings, providing a concise overview of the relationship between fiscal policy and business administration.

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Fiscal Policy and its Impact on Business Administration
Student’s Name
Institution Affiliation
Course Name
Instructor Name
Date

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How has a recent fiscal policy implemented by Congress impacted business
administration? What was its intention, and did it produce expected results? Did this
policy have a positive or negative overall impact on the GDP?
The fiscal policy is when the government attempts to influence and balance its economy by using
government expenditure and taxes. There are two ways to so, implementing the expansionary or
contractionary policy (Hansen, 2018). Congress recently implemented a 35-day federal
government shut down in 2018 as there was an argument on the spending of the US-Mexico
wall. Congress had refused to pass the federal spending budget to cater for this. At the end of
2017, a significant tax cut was approved, and in early 2018, President Donald Trump approved
the increase in public spending that was equal to 0.7% of the country’s GDP for two years (Gili,
2019). This was an expansionary policy that had a significant effect on the economic growth in
2018 and 2019. All this had a negative impact on the overall GDP due to the increased spending
which caused a great deficit in the budget up to the tune of 5% of the GDP.

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References
Gili, R. M. (2019, July 26). What will be of the US fiscal policy? Whatever will be, will be.
Retrieved from https://www.caixabankresearch.com/en/what-will-be-us-fiscal-policy-
whatever-will-be-will-be
Hansen, A. H. (2018). Monetary theory and fiscal policy. Pickle Partners Publishing.