macro eco

Name

University

Course

Tutor

Date

The United States enjoys the sovereignty of been the world 's strongest economic threshold . Perhaps however , the same economic status can be allied to the various policy tools which the federal government uses to structure its economic activity . Generally , the economic system is a compound of both monetary and fiscal policy tools . Since these policy tools have various macroeconomic control implications to the economy , a compound of both policies would provide even a stronger economic status

Generally , these policies provide a strong equilibrium

in the different markets which comprise of the money markets , the labor markets , foreign markets , good markets and the capital market . The economic implication of both the policies is to ensure a strong impact which provide stability in the market

The basic purposes and implications of the two policies are virtually broad . Firstly , the money market helps in providing a support for strong strength in the money market and its constituent markets which helps to control inflation and its broad impacts . Elsewhere , the fiscal policy is highly important in safeguarding the aggregate demand and the aggregate supply so as to provide a strong economic equilibrium . The strength of this equilibrium is important in defining the level with which other markets such as the labor market , the foreign market and also the goods market would fundamentally function (Daniel , Axel , 1995 ) Basically , a strong fiscal policy is important for safeguarding the booming economic activity in U .S which is a benchmark for support of recession control to bring higher rates of unemployment and to stabilize the commodity market

Basically , the fiscal policy tools is highly important . This is in its seldom capacity to control various statutory macroeconomic variables and markets within the economy . The use of the fiscal policy tools would take two outlooks . Firstly , the purpose of taxation is an important macroeconomic variable for control of the economic situation in the country . Taxation is a tool used by the federal government to facilitate economic control through either increasing or reducing the amount of income of the households and the business community . Through various taxation states , the level of income to the people and business is controlled for strong economic activity . Either , government spending remains an important tool with which the economic aggregate demand can be controlled . Through government expenditure to different state organs there is economic growth of the GDP through multiplier effect (Horwitz 2000 , 65

Elsewhere , a broad phenomenon of monetary policies remains important for the U .S economy . Generally , U .S has a broad monetary policy tools which help to control the money market and other facets of the economy . The strength of these policies provides low rates of inflation which keep the economic activities at a high portfolio

Generally , the monetary policy tools are diverse . Firstly , the employment of the bank reserves is a potential tool for the success of the U .S economy . This is the statutory depository amount which the commercial banks are made to maintain within the...