Domestic Policies - ← ← ← Monetary policies •...

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Domestic Policies 28/11/2007 11:03:00 Economic Policy Types of economic system o Capitalism – free market: little interference from the government o Socialism – collective ownership: government controls the market o Mixed economy – American economy: government does interfere time  to time, dependent on issues but not all the time Regulation on economy o Started from the Great Depression o Reasoning behind it is that the government can help during many  fluctuation of economy Ways of how the government can regulate the economy Fiscal Policies President and Congress make the fiscal policies o Fiscal policies are effective on private sectors Spending on private sectors can boost the economy Increase/Decreasing taxes can affect the economy Farm subsidies
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Unformatted text preview: ← ← ← Monetary policies • Federal reserve board (There are 12 federal reserve banks in the nation) o They are supposed to control the flow of money in United States Interest Rates (raise/lower) Bonds (buy/sell) Reserve requirement (increase/decrease) o A lot of government spending is mandatory, and that complicates the government’s ability to use fiscal policy o Supply-side economics – more taxes on wealthier end of spectrum in hoping that those taxes could be reinvested in the economy ← ← Deficit: Amount of loss of national budget in one year ← Debt: Accumulation of deficit over the course of many years (about 8 trillion dollars) 28/11/2007 11:03:00 ← 28/11/2007 11:03:00 ←...
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