Two Of The Most Implemented Policies Government Use To Achieve Economic Growth Are Monetary Policy And Fiscal Policy
Introduction
According to a article by Rich Karlgaard from forbes. During the great recession. U.S economy was performing better then expected and was growing. From 2008 to 2010, U.S GDP is projected at 14.3 trillion, 14.2 trillion, 14.6 trillion. So how did this actually happen? Carl Schramm, who heads America’s top entrepreneurial think tank, the Kauffman Foundation, explain in a interview with the author:
“The single most important contributor to a nation’s economic growth is the number of startups that grow to a billion dollars in revenue within 20 years.”
The statement made by Carl Schramm suggested that the increase of start ups, is the most important contributor to a nation economic growth. (Karlgraard,2010)
Economic growth is an increase in of the Real Gross Domestic Product (Real GDP). And it is mainly cause by two factors, an increase in aggregate demand(AD) and aggregate supply(AS). According the the formula AD = C + I + G + X – M. C = Consumer Spending, I =Investment, G = Government spending, X= Export, M= Import. If there is a increment in investment, Government spending , consumer spending or export, there will be economic growth. In the by Rich Karlgaard, there is a increment in investment ,government spending and consumer spending which is what causes the growth. And to have such increment, it would depend heavily on the government. (Pettinger,2011)
Having economy growth would mean a better standard of living, More jobs, environmental benefits but of course there will be a trade-off. In this essay, we will explore the government contribution to the economy growth and the trade-off of economic growth.
Fiscal And Monetary Policies
According to the formula AD = C + I + G +X –M, we understand government have a huge part in the economic growth of a nation. If government spending increase it will cause the the AD to increase as well which would then lead to the increment in the GDP of the nation. Conversly, government can decrease their spending
According to a article by Rich Karlgaard from forbes. During the great recession. U.S economy was performing better then expected and was growing. From 2008 to 2010, U.S GDP is projected at 14.3 trillion, 14.2 trillion, 14.6 trillion. So how did this actually happen? Carl Schramm, who heads America’s top entrepreneurial think tank, the Kauffman Foundation, explain in a interview with the author:
“The single most important contributor to a nation’s economic growth is the number of startups that grow to a billion dollars in revenue within 20 years.”
The statement made by Carl Schramm suggested that the increase of start ups, is the most important contributor to a nation economic growth. (Karlgraard,2010)
Economic growth is an increase in of the Real Gross Domestic Product (Real GDP). And it is mainly cause by two factors, an increase in aggregate demand(AD) and aggregate supply(AS). According the the formula AD = C + I + G + X – M. C = Consumer Spending, I =Investment, G = Government spending, X= Export, M= Import. If there is a increment in investment, Government spending , consumer spending or export, there will be economic growth. In the by Rich Karlgaard, there is a increment in investment ,government spending and consumer spending which is what causes the growth. And to have such increment, it would depend heavily on the government. (Pettinger,2011)
Having economy growth would mean a better standard of living, More jobs, environmental benefits but of course there will be a trade-off. In this essay, we will explore the government contribution to the economy growth and the trade-off of economic growth.
Fiscal And Monetary Policies
According to the formula AD = C + I + G +X –M, we understand government have a huge part in the economic growth of a nation. If government spending increase it will cause the the AD to increase as well which would then lead to the increment in the GDP of the nation. Conversly, government can decrease their spending
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