PB202 MACROECONOMICS

ROLE OFGOVERNMENT

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GROUP 6SIRVIA BINTI LADJA 10DIB

11F2028

MOHD FAZRUL BIN ISMAIL 10DIB11F2014

FATIN AMANI MUMTAZ BT MUHAMAD YUSOF 10 DIB11F2059

NURUL SAIYIDAH BT MOHD ISA 10DIB11F2008

MACROECONOMIC

GOVERNMENT POLICY

The concept of macroeconomic polycy is wide and refer ot to both fiscal and moneytery policy instrument, which the government employers to manage the economy.

The two important sub-division of any government policy are moneytary policy and the fiscal policy.

MACROECONOMIC

MONEYTARY POLICY

The monetary policy refer to a policy which employs the central bank’s control of the supply of money as an instrument for achieving the objectives of the general economic policy.

A moneytary policy may aim to achieve the optimum level of employment and output, price stbility, balance of payment equiblirium or other goals of the government’s economic policy with the regulation by the central bank.

MACROECONOMIC

Objectives of

Moneytary Policy

To maintain domestic price stability To achive a balance of payment equilibrium T achive full employment of resources To achive a higher rate of economic growth To maintain a continuously low structure of interest rates

ExpansionaryMoneytary Policy

MACROECONOMIC

Types of Moneytary

Policy

ContractionaryMoneytary Policy

ExpansionaryMoneytary

Policy

MACROECONOMIC

The expansionary of moneytary policy is aimed at increasing the money supply in the economy

Contractionary

Moneytary

Policy

The contractionary monetary policy is adopted todecrease the money supply in the economy

MACROECONOMIC

FISCAL P

OLICY

Fiscal policy refers to the use of government taxation and expenditure to influence the country’s spending, employment and price level.

In the other words, a Fiscal policy refers to regulation of the level of government spending, taxation and public debt.

MACROECONOMIC

Objectives of

Fiscal Policy

Securing efficient allocation of economic resources Attaining and maintaining full employment Accelarating the rate of economic growth Controlling the equitable distribution of income and wealth

ExpanctionaryFiscal Policy

MACROECONOMIC

Types of Fiscal Policy

ContractionaryFiscal Policy

ExpansionaryFiscal Policy

MACROECONOMIC

Contractionary

Fiscal Policy

The expansionary fiscal policy is adopted to overcome unemployment or recession problems

The contractionary fiscal policy is adopted to overcome inflationary problems

MACROECONOMIC

THE END

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