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Category: Essay

Subcategory: Economics

Level: College

Pages: 1

Words: 275

Different policies are adopted by governments that hope to maintain continuous economic growth as well as save economies that are failing. The policy to be adopted in a particular economy is dependent on the causes of deterioration economic growth. Micropoland is an economy that is suffering from the recession which has also resulted in a reduction in the levels of consumption. It has also resulted in high levels of unemployment, and this can be remedied by focusing on expansionary monetary and fiscal policies.
The economy can be revived by applying expansionary monetary policies. Monetary policies are applied by the central bank and are geared toward stimulating economic growth. The economy can be stimulated by increasing the supply of money within the economy. The government can lower the interest rates which would result in a situation where more borrowers are able to access credit (Pettinger N.p). The credit can be invested in the economy, and this will offer additional sources of employment. The expansionary monetary policies are also geared towards ensuring that the local economy can benefit from an increase in the aggregate demand.
In terms of the expansionary fiscal policy, the government strives to expand the money supply in the economy. The local economy can be improved by adopting measures such as an increase in government spending in the economy (Pettinger N.p). This would increase the amount of money available in the …

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