❏Public spending Despite Netflix’s investment in most of its money on content, federal investments in the UShave not supported Netflix at the moment due to its political backgrounds. Moreover, this hasimpacted Netflix’s expansion in the US grounds; therefore, it is reasonable that Netflix hassought to expand abroad. Based on BEA reports, from 2018 to 2020, the general governmentexpenditures have been increasing, which aims to be the expansionary policy (S&P Rankings,2020).❏Transfers In fiscal policy, transfer payments act in a similar way with taxes. Transfer payments can bedescribed as the payments in which goods or services are not traded. Mainly, in the UnitedStates, the transfer payments consist of welfare checks, unemployment insurance, and socialsecurity. The differences in transfer payments continuously lead to differences in consumerincome. According to Bureau Statistics, the general transfer payments have continuouslyrisen as expansion in the last three years (2020). As a result, it stimulates higher purchasingpower and an increase in disposable income, which is calculated by using income minus taxand add transfer. At present, there are no transfers for the company itself. ❏Public debt As mentioned the Netflix spent a ton of money on building original content, it has beensuffering in a budget deficit of 15 billion USD in debt. Despite that, the debt will not bekilling Netflix as financial indicators signal that Netflix is leveraging its capital efficiently.With its return on equity performing so well, Netflix will choose to obtain more debt tooptimize its cost on capital. For now, the public debt on Netflix is considered not as impactfulas they get more subscribers overseas to cover their debt, and maintaining high levels ofROE, it should put Netflix Inc. in a favorable situation to expand internationally.9
Monetary Policy Monetary policy in America is simple; they want to promote maximum employment, stableprices, and moderate long-term interest rates. These are the three economic goals issued bythe US Congress. Additionally, the central bank is more than willing to lend money forNetflix Inc. (NFLX), as they create many jobs and promote customers' online spending. Inreturn, Netflix also offers a lot of job openings online, so it also fulfills the goals ofmaximizing employment. For the current money supply chain in the US, it is managed by theFederal Reserve System, and recently in 2020, the money supply increased to $17176.10billion in April from $16103.90 billion (Trading Economics, 2020). It is likely that the USwill lower their interest rates, which, in turn, generates more investment, thereby stimulatingspending. It would lead to an increase in the inflation rate and the contractionary of theirmonetary policy. In this instance, the U.S annual inflation rate stands at 0.3%, their lowestsince 2015 due to the plunge in gasoline prices, and its exchange rate with the Euro currencyis 1to 0.89, which is relatively stable according to the US central banks (Central Bank, 2020).