Economic Policy for Development
Introduction
Economic policy refers to an action course where intention is to influence and control the behavior of the economy within a country. Therefore, it is typically the government of a State that has the task of implementing such policies. There are several economic policies and are divided into three different categories that are pragmatic nationalism, mercantilism and free market. Such policies include the decisions that are made with respect to taxes and government expenditure, the redistribution of the income of the rich to the poor, in addition to the supply of money.
Developing
In the economy of a State, you can access the effectiveness of the economic policies of one of the two ways that are regulations and the positive economy. This document analyzes economic policies in the United States and the way in which the economic factors involve such procedures that influence decision -making, both from the private sector and the public within the State, as well as the economic actions that are practiced in theGovernment levels within the United States.
The way in which the economic factors involving economic policies affect the decision making of the public and private sectors in the United States. Government’s economic policies always have various microeconomic effects when their implementation alters inputs and incentives for the economic decisions of an individual. It is known that such changes come in several ways including regulations, fiscal policy, tariffs, subsidies and legal tender laws. Others include public-private partnerships and licenses to name some.
In the economy of a country, these policies are very important, since they manipulate the costs and benefits facing both public and private sectors and individuals in almost all facets of modern life. Economic policies cause both intentional and unintentional consequences. An example of intentional effects includes a situation in which the government gives a subsidy to farmers as a way of making their business more profitable, and, therefore, fosters production. On the other hand, the effects can be involuntary.
Where the government could impose a tax on basic products, such as cigarettes and alcohol, to discourage the behaviors that do not approve. Economic policies affect the decision making of the public and private sectors on the efficiency of allocation and economic in different areas of the economy in the way in which the resources of the United States, which are typically the production factors and include the hand ofwork, capital and other natural resources. Resources are used in the production of various services and goods.
If these inputs are distributed to their real uses, which should have the highest value. In addition, economic policies and their factors influence vitality and competitiveness within companies and industries. They determine the possibility of forming a new successful business in its growth and prosperity, in addition to being less recognized within the market, as well as the viability of the failed business that leaves the market or even that it closes completely. In addition, economic policies determine the costs and benefits in promoting both the public and public goods.
For those regulations that are justified by the public good and the perspective of social benefit, in addition to the determination of themselves such rules consider economic costs compared to the benefits achieved, ASO as the profitability of alternative approaches. Also in the United States, economic policies affect the decision making of the public and private sectors, since they determine employment and macroeconomic effects. These include cyclic movements in the economy that could be in the short term, such as employment during recession.
Together with long -term growth and the progress of the economy, as through innovation and investment. The public and private sectors are also able to make their distributive affections regarding the existing economic policies in the United States that help determine the business, and more fundamentally and significantly the real types of people who end up supporting the cost of costeconomic regulation within the country. The economic actions practiced in the Government. The government always intervenes and carries out several economic policies.
Guarantee the proper functioning of public operations. The economy provides Laissez-Faire, where markets always adapt better assignment of scarce resources, which allows demand forces and supply to set prices. However, it is the government’s work to ensure that property rights are protected, the rule of law is maintained, in addition to the maintenance of the value of its currency. This is because, although competitive markets often offer improvements in the productive efficiency of allocation and dynamics.
There are several occasions in which it fails, which constitutes a case for government intervention. The main reasons for government intervention in markets are to correct market failures to achieve a more equitable distribution of income and wealth, as well as guarantee the improvement of economy’s performance. The United States government agrees to economic freedom, since he induces economic freedom in the country. It has an integral vision in which some of the economic and evaluated economic aspects are mainly related to the country’s interaction with the rest of the world.
Such include the opening of the United States economy to global investment, as well as trade. In addition, the country evaluates the freedom of individuals for their use of finance and work without undue restrictions and state interference. When doing this, the government ensures that there is complementarity in the impacts, since progress in an area always reinforces and inspires the development of the other. Again, repressed economic freedom in a single field, for example, the lack of respect for property rights can lead to difficulties in achieving high levels of freedom in the other categories.
The function of imposing tax burdens on the country’s economic activities through loans and taxes. However, governments that allow both individuals and companies in the State to administer and maintain a greater proportion of their wealth and income for their use and benefit, end up maximizing economic freedom. This is because the greater the proportion of the wealth and income of the government, the lower the rewards for those indicated for their economic and minor activity the incentives to work.
High tax rates reduce the capacity of the individual and those of companies to achieve their goals in the market, therefore, lower levels of the general activities of the private sector. The understanding that corporate and individual taxes made by the Government are very important in addition to being direct restrictions on the economic freedom of an individual. Although this is reflected in the index, they are no longer an integral measure of the tax burden. The Government, therefore, imposes many other taxes that include payrolls, special taxes, sales and tariffs.
As well as value added taxes (VAT). In the economic freedom index, the Government guarantees that these taxes are captured through the measurement of general tax burdens of all tax forms such as the total percentage of the Gross Domestic Product (GDP). The fact that the Government does not intervene in economy politics entails an increase in deficits. The growth of debt loads as a result of poor budget management by the government, which derives in the erosion of tax revenues in the country that disturbs macroeconomics stability, induces the economy.
It is worth noting that economic policy is of great importance in the United States. This is because it guarantees economic prosperity, stable markets, employment protection and business development in the country. Once again, economic policy also guarantees objects such as the spending of the military and the nationalization that are of great importance. The Government, therefore, uses policy tools that are under government control to ensure that the objectives and goals are achieved.
conclusion
These tools include interest rates, tariffs, money supply, spending and taxes, market labor regulations, exchange rates, among others. Rule -based policies are, therefore, more credible, since they are more transparent in addition to being easier to anticipate. Examples of these policies are fixed exchange rates, the stability and growth pact, the norms on interest rates. This ensures that the country remains stable in terms of the economy and as a result development.
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