StudentShare solutions
Triangle menu

UK Governments Policy - Essay Example

Nobody downloaded yet

Extract of sample
UK Governments Policy

Fiscal policy involves budgetary measures in which the government carries through a deficit budget in order to stimulate the economy by charging lower corporate taxes. In other words fiscal revenue in the given fiscal year will be less than government expenditure on projects. These projects are naturalluy intended to stimulate spending and subsequent economic growth (Ertl, 2008). When the government spends more than what it collects by way of taxes, especially business taxes, more money would be left in the hands of the people and businesses to spend or/and save. When such money comes into circulation the economy gets a boost.
Fiscal stimulus programs are intended to solve the problem of persistent unemployment and underemployment in the economy through government spending. However they don't always produce the desired outcomes. For instance representative agent models in varying degrees point out to the fact that the outcomes of such fiscal stimulus programs might be negated without the slightest warning because some or all the variables in the model go awry due to some reasons which were not foreseen at the time of planning. The government might adopt a deficit budget approach and expect the economy to respond accordingly (Garrett, Graddy, & Jackson, 2008). However as many such fiscal policy alternatives suggest there can be unforeseen forces that would interfere with the macroeconomic variables and produce unexpected negative results.
Harrod-Domar Model, for example, assumes that there is a surplus of labor so that general unemployment acts as a stimulus for the unemployed to accept jobs at the going wage rate. Secondly it assumes that all production is proportional to the capital stock. Given these two assumptions the econmy would be able to absorb the extra spending of the government and the private enterprise to fuel a new cycle of growth. However there is a snag by way of the prevalent real wage rate in the economy (Hemming, R., Kell, M., Mahfouz, S. & International Monetary Fund, 2002). Assuming that the real wage rate is either stagnant or grows at a rate less than the rate of inflation, then there is the crux of the matter. Will those unemployed be prepared to accept jobs at the existing wage rate It depends on two outcomes. If there are more jobs than what unemployed people would want, then there could be an upward pressure on wages simply through the intervention of the economic law "when demand (for labor) is greater than supply (of labor), the wage rate would rise". Secondly if there are more unemployed people than the available number of jobs, the reverse of the above law will apply. In the second instance, depressed wages would bring down costs of production and though the aggregate demand in the domestic economy would be lower there would be a greater demand for the country's exports.
In fact this argument has both a Keynesian/Neo-Keynesian and Classical/Neoclassical flavor. However if monetarist theoretical underpinnings were introduced into the argument through inflationary pressures that result from the government's and private enterprise's initial spending round, then those outcomes as predicted by the first representative agent models wouldn't hold but a new set of ...Show more


Expansionary fiscal and monetary policy measures are adopted by governments in response to recessions or economic downturns. A recession, defined as two consecutive quarters of negative Gross Domestic Product (GDP) growth in a year, can be partially or wholly reversed by using a combination of macroeconomic measures or solutions such as fiscal or/and monetary policy measures…
Author : mekhistreich
UK Governments Policy essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"UK Governments Policy"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Rent Policy in the UK
There are 3 stages in legislation which lead up to today's Housing rent Policy: before 2002, 2002 and post 2008. The current regulatory organizations, the TSA and the HCA are important end results of the Restructuring framework of 2002. The UK has gone from uncontrolled rents and social housing to Westminster controlled to a combination of government, city council and association controlled.
8 pages (2000 words) Essay
UK Drug Policy
It is estimated that there were 1,644 drug related deaths in 2005 in Britain. Currently it is estimated that there are 327,000 problematic drug users in England. In England and Wales, it is estimated that more than four million people use drugs each year.
12 pages (3000 words) Essay
Governments Attitude and Policy towards Sport
Explore similarities and differences and draw on academic sources to support arguments. Sports have been an integral part of British life for many decades. They are both a practical attempt to enable the British to become fit, in their amateur ranks, and are also part of a national mythology, such as the Football World Cup win of 1966 and the Rugby World Cup win of 2003.
8 pages (2000 words) Essay
Governments Health Policy
According to the paper if anyone wonders just how important the delivery of primary health care is to the general public and just how much this system is valued by the programs beneficiaries, one can immediately gauge the depth of public interest by the levels of proactive input which was generated by the DOH 2005 Our health, Our care, Our say.
11 pages (2750 words) Essay
UK Governments Policy Changes
These benefits include: higher educational standards, more prosperous economies and stronger and safer communities, in which everyone becomes a participant (Sport England, 2004). These realisations appear to be reflected in the current UK Government policies towards young people sport and physical activity, especially in the aftermath of the successful bidding for the 2012 Olympic Games.
8 pages (2000 words) Essay
Labour Governments and Truancy in the UK
1990). This absence can range from a single class to several weeks (Atkinson M, Halsey K, Wilkin A & Kinder K, 2000). The third chapter examines the causes of truant behaviour. Despite the unequivocal exhortation of the 1996 Education Act that only the school authorities have the power to permit absence from school, parentally approved absence from school poses a major obstacle to reduce truancy and many a time the excuses given by parents to explain the absence of their children are untenable (OFSTED, 2001).
12 pages (3000 words) Essay
Has the UK government engaged in the politics of panic over counter terrorism If so, how has this affected its counter terrorism policy
Terrorism has caused wide ripples in the UK society in the last few decades. The UK society and government was affected initially by the Irish republican terrorism and later by Islamic terrorism. It is often seen that UK tastes its own medicine. Many are of the
8 pages (2000 words) Essay
Report on the UK Governments new welfare system project
The project is expected to end in 2023 and will cost the government approximately 2.3 billion pounds with over 300, 000 claimants as beneficiaries at the end periods (Daily post, 2013). A welfare system is a platform that
6 pages (1500 words) Essay
UK Government Urban Policy Agenda
The number of people living in the rural areas has decreased as they are moving to urban areas in order to get better access to various amenities. In addition, the immigrants are putting pressure on the government to improve the current urban environment in the cities in order to support the surging number of people.
12 pages (3000 words) Essay
UK renewable resources and policy
The UK has vast renewable energy resources. It has wind, wave, and tidal resources in Europe (White & Beeby, 2010). Renewable energy sources are the alternative sources of electricity because most industrialized countries do not depend on them as the primary energy source.
3 pages (750 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Contact Us