so you will lose a mark for the graphs.(Original post by Milena1810)
Yeah, I mucked up the graphs but I wrote those explanations. The exp fiscal policy Q was 'does exp fiscal policy always increase economic growth?' And the other was 'there is an increase in wages. Does this mean that more bankers will be unemployed or something?
Do you have a copy of the paper?
yes it increases economic growth as when taxes reduce, disposable income increases and so more demand for products as a result, production will rise which will increase GDP
However, BOP on current account will be poor as imports will increase due to more disposable income and as a result local firms will face problems and may close down which will reduce output of the country-GDP reduces
overall, it depends on how the government used its expenditure . eg if used in purchasing military weapons, then there is no economic growth i.e money has been wasted
There will be unemployment as it is an extra expense for the government and to reduce the expenses some workers will have to be sacked
However, it is affected by the importance of the job and if it is in high demand, instead of sacking them, more workers will be attracted to the job and be employed
overall, if workers are members of trade unions, they may not get sacked as their rights will be fought for
i don't have the copy of the paper
your comment for the above question can be as follows:
overall, it depends on the state of the economy i.e if in a recession, workers will be sacked because there is a high pressure of expenses on the government while there will be little pressure felt during a boom
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Last edited by am200; 14-06-2016 at 12:36.
- 12-06-2016 13:53