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Unformatted text preview: There are 7 basic economic policies that states can pursue that will affect a state’s position in the global economy. 1. Macroeconomic policies 2. Microeconomic policies 3. Governance policies These first three are considered behind-the-border policies – they will affect all domestic goods, services, capital, and labor whether they are traded or not. 4. Exchange rate policies 5. Trade policies 6. Policies towards foreign direct investment and financial flows 7. Immigration policies These last four are called border policies – they affect goods, services, capital and labor only when these things cross national boundaries. Macroeconomic policies: These primarily concern monetary and fiscal policy and, internationally, the balance of payments. Fiscal policy concerns the state’s budget. A balanced budget has a neutral effect on the economy. A budget deficit means that the state is spending more in the economy than it is taking in in taxes – this, according to Keynesians, will have a stimulative effect on the...
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This note was uploaded on 11/25/2011 for the course POLISCI 1003 taught by Professor Olson during the Fall '11 term at GWU.
- Fall '11