Macroeconomics and Microeconomics,Government spending and Fiscal Essay

Macroeconomics and Microeconomics,Government spending and Fiscal Policy, Taxation, - Essay Example Problem with this measure is that it does not include the goods and services that are not made public. 3. The US does not use tariffs and foreign exchange rates to control or influence its economy because they have signed a policy with the WTO which has barred them for conducting such activities in order to promote international trade. The monetary policy tool is used to decrease or increase the amount of capital within an economy. The government adopts an expansionary monetary policy in order to increase money supply within the country and adopts a contraction one to make the opposite possible. The government uses the tool of taxes to in order to increase and decrease a certain economic activity from taking place. Taxes are levied on individual goods and services. Government may influence the employment side of the economy when it uses the job training and education tool to influence economy. Monetary policy has a major impact on the economy of a country as it does not impacts a certain portion of the economy, rather it effects the entire population and the their spending and saving patterns. 4. President Obama plans to decrease the budget deficit by decreasing government spending by a considerable amount, similar are the plans of Romney, but along this plan he even plans to decrease taxes in order to increase spending which will ultimately increase revenue and GDP. 5. Market is a place where buyers and sellers interact with each other to conduct transactions, regulations are rules and guidelines set to control the activities of buyers and sellers to make sure that both groups do not cheat each other. 6. Demand is the number of goods and services that a person is willing, able and has the money to buy and supply is the amount of goods and services manufacturers are, willing and able to sell at a particular price. Demand and supply