Unit 6 Scenario B-2 Essay Example | Topics and Well Written Essays - 500 words

social unit 6 Scenario B-2 - Essay ExampleThis memo will also highlight the differences in the midst of monetary and fiscal policies, what are the pros and cons associated with each type of policy? Is either policy more effective in ontogenesis outfit growth or stabilizing inflation and unemployment?With reference to the tax changes, a slack in the tax rate would help achieve the desired increase in output.i.e lower the tax rates more people will buy meaning the demand will be high and so the output would be high .this decrease in tax rates would further imply an increase in the residuum price, the output and the unemployment rate. Furthermore if we analyze, we can foresee the following Pros and cons of the situation discussed above pros being the fact that the unemployment rates will decrease the Marginal Pr undeterminedsity to consume (MPC) and the Gross Domestic Product (GDP) will Increase subsequently. One actually serious aspect which is a definite Con the governments Ta x Revenue will decrease.The changes in open Market operations to achieve the desired increase in output would imply the following the commutation bank will increase their government securities, people will spend more and so the output will rise. This flux will then imply the following trend an increase in the equilibrium price, an increase in the output and a subsequent decrease in the unemployment rate.Elaborating on the relationship between the deficits and national debt, we would like to mention the fact s that need to be considered here .In order to pick up how both national debt and deficits go hand in hand A budget deficit will imply an increase in the size of the national debt, only by the amount of the deficit .Conversely, if thither is a budget surplus it will allow the government to pay off the bond holders thus reducing the size of the national debt.The difference between the monetary and fiscal policy is obvious as by monetary policy is meant all actions that a governm ent takes to control the