Posts published in “MACROECONOMICS”

Monetary Policy deals with the supply of money in the economy. It is concerned primarily with decisions about interest rates. 

In order to achieve economic objectives, the government will affect the economic activities. It will be done by arranging changes in TAXes.

The government budgetary decisions will be mainly concerned with raising the money from TAXes, and then spending the money on public projects.

Government spending means the government spending money on government-sponsored projects in industries owned and controlled by the state. 

Fiscal Policies mean changes by the government in the TAX rate or public-sector government spending in order to influence business activity.

Different businesses on the market will be impacted to a various degree by the government involvement in markets.

The government strives for extreme inequality reduction in the society to make the population more equal and inclusive for all.

A currency depreciation is when its value decreases comparing with another currency. As measured by its exchange rate against another currency.

A currency appreciation is when its value increases comparing with another currency. As measured by its exchange rate against another currency.

Changes in the exchange rate of the currency can affect the whole economy because exchange rate stability guarantees the success of international trade.

Government’s economic objective is to keep Balance of Payment, all transactions between a country and all the rest of the world, at healthy level.

Inflation makes planning difficult and results become much less reliable. It is because inflation adds to uncertainty about forecasting the future. 

Deflation increases the value of money over time. During the times of deflation, prices in a country will have the persistent tendency to decrease.

Deflation is the trend of decreasing prices of the products in the economy. Deflation changes the value of money – it increases it.

Government will issue policies aiming to reduce aggregate demand and lower costs to tackle inflation. These policies will impact on businesses.