The monetary and fiscal policies

Monetary and Fiscal Policy as Economic Tools

Monetary and fiscal policy are powerful tools that can be utilized to affect the economy. As President, I have the ability to positively influence the economy by encouraging the monetary authorities to make reforms for the betterment and development of the economy. In my perspective, I would lower interest rates and increase the flow of money, which would encourage individuals to spend more and therefore strengthen the economy. This is a method that has the potential to stimulate the economy by lowering unemployment levels as more job possibilities become available.

Decreasing Taxes to Stimulate the Economy

Another viable option that can also suffice in stimulating an economy would be decreasing taxes. When taxes are decreased, people remain with more money from their earnings. Such an effect will therefore increase the spending rates, and even investments. Moreover, these changes will have an overall trickle-down effect to the rest of the population as more jobs will be realized through increased production. In such a manner, the economy will have been boosted.

The Impact of Fiscal and Monetary Policies on the Economy

In essence, the fiscal and monetary policies are very essential economic drivers that can either improve or harm the economy. The monetary policy, which affects the price or value of money in regards to investors, is important in that it affects investor confidence. With a strong currency, there is increased confidence that spurs investments and increases the amount of foreign capital. With low rates of interests, the value of money is lowered and consequently, spending rates increase. In the same tune, lowering of taxes allows people to keep more, and thus spend more, which significantly boost the economy. Contrary, increasing the taxes would chase most foreign investors.

Collaboration for a Better Economy

Therefore, as a President, I would work in tandem with the financial authorities to ensure that there is more money, low interests and lesser taxes. Such a move, if checked and monitored astutely, would lead to a better economy.

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