Fiscal Policy

Essay by krikaUniversity, Bachelor'sB+, October 2008

download word file, 2 pages 0.0

The purpose over this paper is to summarize the Fiscal Policy analysis that I have accumulated for this simulation. This simulation exams the importance of fiscal policy of a government in setting the level of pubic expenditure and how should the expenditure be funded.

The effects of the changes in the fiscal policy of this simulation were based on injecting money in a particular area such as government spending on infrastructure; government spending on education program and income tax. For example, if the government spend more money on infrastructure to create jobs, it also creates higher inflation because people have more money to spend it. Depending on how the money is distributed the government will be able to work through an economic in recession.

The four key points from the reading assignments that were emphasized in this simulation were; inflation, changes in taxes, unemployment, changes in government spending and programs.

To apply what I have learned from this simulation to the workplace Northern Virginia Community College would have to increase tuition in order to receive that money in terms of income tax, hire new people to help the unemployment rate, create business with small local industries. All of these decisions will help the money circulate within this area which will be beneficial to the majority in the area.

My growing Further Results were the following;On the first simulation the economy was in recession. For this type of economy it is best to increase government spending on infrastructure projects by $300 million and $100 million on education, which, on the short run, is better then investing in education. Another decision was to increase income tax by .5% with that decision; income tax revenue will increase by $100million.

For the second simulation the main goal is to reduce inflation. Inflation does not...