Major Debates Over Macroeconomics Policy.docx

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Running head: MAJOR DEBATES OVER MACROECONOMIC POLICY 1 Major Debates Over Macroeconomic Policy Soraya Taylor ECO/372 February 19, 2018 Paul Updike
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MAJOR DEBATES OVER MACROECONOMIC POLICY 2 Major Debates Over Macroeconomic Policy Fiscal policy remains one of the most excellent tools in Macroeconomics for any government in the world. It affects all players in the industry and even consumers. It usually will affect internal trade, production of goods and services and a population’s access to essential services. It affects employment, production and also trades. It may also extend its ripple effect on a region or block as shown by the recent Brexit. Due to this significant impact of one decision, it is imperative to make a proper deliberation before implementing any changes in a country’s Fiscal policy. Various strategies are applicable for any government to follow as illustrated by Economic experts. They are however not ideal for all occasions as they have their flaws. Increased Government Spending to Fight Recessions A recession is a period of Economic slowdown or decrease in Economic indicators for growth and stability. Before we understand depression, it is wise to know the factors that guide steady Economic growth. These include endogenous factors and exogenous factors. Advocate's Position Endogenous factors include a peaceful and stable atmosphere for conducting business. Economists would usually ignore this element assume as this condition is constant. A recession, however, can result from political and regional instability as illustrated by the recessions that hit the USA during the aftermath of the First World War and before the Second World War. Although the country was stable and did not engage in the wars in the land, the effects of the war were ringing out in the country. Increased government spending kept the Nation afloat (Kuester, 2011).
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MAJOR DEBATES OVER MACROECONOMIC POLICY 3 Employment stimulates Economic growth. An unemployed population cannot achieve much since people have no source of income to sustain Economic activities. Unemployment
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