Essay on Government Policy to Stimulate the Economy

Introduction

In the stimulation of Government policies, various approaches deliver on the development of the economy. In every economy, it is imperative to maintain an appropriate growth of the economy. Through the details on the stimulation of the economy, implementation of various government policies is significant. The changes may not prove sufficient instantly; however, in the long run, the changes are evident through the activities and practices within the details of the policy. In the provision of appropriate government policy, considering the current economic position is relatively essential since it determines the concepts within the bracket of economic development.

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In the implementation of significant measures, both the monetary policy and the fiscal policy would render ample stimulation of the economy. These government policies are among the best systems proving productive especially with administrations such as the U.S. However; I would recommend the implementation of the monetary policy by the government in developing the economy. Within the details of the monetary policy, it renders significant impacts through differing happening. In the system, it entails a change in the interest rate and affecting the supply of the money. For example, it would include the quantitative easing. Also, along with its implementation in impacting the economy, it remits that; the increase the spending of an economy and ensures the encouragement of the economic growth, the government may decide to lower the interest rates and to increase the money supply. Even though to some extent the intervention may render inflations, it is significant in its implementation. On the other hand, if the stimulation of the economy is too high or growing at a very high rate and there are drastic or too many inflations, the government may decide to increase the interest rates especially in its operations and revenues which lower the supply of money thus discourages people from spending.

Correspondingly, the recommended policy involving the monetary policy entails various details within its context e=which furthermore play a significant role in delivering the best strategy. Within it, it comprises the attempt of the government to lower the interest rates which increase the money flow. Under the actualization of the plan, the policy would provide a significant help not only too few individuals of the U.S population but the entire U.S population as a whole. It is because, within the details of the government policy, the "Federal Reserve" involves which maintains the flow of cash into the economy by making the various measurements and taking the significant step according to the current requirement of the economy. As a result, there a low or no chances that the policy is intended to impact a substantial population if not the entire set of the U.S. with the manifestation, the authorities within the Federal Reserve may decide to use three significant tools, namely the discount rate, reserve requirements, and the open market operations Gertler 45-47).

Conclusion

Nonetheless, since the implementation of the monetary policy base on the actions of the "Federal Reserve" to control the money flow as per the instructions of the government, the application does not require much funding. In the intervention, it seeks the government taking charge of the interest rates in the economy and lowering them which in various happenings it ensures the utilization and implementation are adhered to through the control of the banks that control the monetary happenings. However, the primary and most significant principle entails the operational efficiency which seeks the operational frameworks to ensure the monetary policy transmission mechanism is functional.

Works Cited

Gertler, Mark, and Peter Karadi. "Monetary policy surprises, credit costs, and economic activity." American Economic Journal: Macroeconomics 7.1 (2015): 44-76.

Ramey, Valerie A. "Can government purchases stimulate the economy?" Journal of Economic Literature 49.3 (2011): 673-85.