Government Economic Policies and Business Essay Example for Free

Government Economic Policies and Business Essay(a) The government use fiscal policy to increase domain spending. This implies that a grind away in taxation alike took place. The rise in taxes meant that population had less money to spend, i.e. less disposable income. As a result, they were unable to acquire as much. This ca employ the demand of certain products to decline. As a result, the respective companies made less profit. This meant that they were unable to promote as much ( alike to avoid excess supply). This led to companies cutting jobs. The cut in jobs increased unemployment, which meant people had no job, so they had no income, therefore they were unable to spend, which makes the demand fall further, and so on.(b) The government had used fiscal policy to boost the economy. In Japan, the fiscal policy was used to fund the games industry, to create much jobs, in order to increase the income and therefore, increase spending by the people in those jobs. However, we tooshie stop from the graphs that retail sales in Japan in 1997 were dramatically falling. A cause for this was the GDP which also hit an all time low in Japan. This meant that people did not have the money to spend, therefore, from the show up available we can say that Japans fiscal policy was unsuccessful.(c) The countrys budget provides an opportunity not only to point an overview of the macro-economy, but also to make changes to the incentive structures created by different taxes. The chancellor has many objectives to consider at budget time. One of these objectives whitethorn be to increase taxes on polluting fuels (e.g. petrol) so as to discourage their use. This can be controlled by the fiscal policy, which, in this case would involve increasing taxes on such fuels.This may come as a direct tax on the petrol, or more indirectly by increasing the road tax on bigger vehicles. Provided that such polluting fuels are used to the same extent, this would pay higher tax revenue for the government which can then be used to increase public spending, such as building hospitals, which would not only result in better healthcare, but it would also create jobs, which would mean that people would be earning, allowing them more disposable income, and thus influencing spending power, which may in fact be another objective of the government.