Question

What are the issues faced by government policymakers in their attempts to maintain adequate economic growth over time? Please explain in more detail.

Answer 1

Answer - The policy makers have to face various issues while formulating the policy. They need to consider the impact upon the foreign exchange rate while formulation of the fiscal policies. They have to consider the impact of lags upon the policy in order to access that how much time will the policies take to be effective in the economy. The considerations regarding the GDP , inflation rates , rate of unemployment are very important while the formuation of policies take place . Such as in the policy where the tax needs to be increased , the income levels have to be considered in order to access the capacity to pay. The policie also need to consider the deficit and surplus impacts upon the economy . Hence these are the main considerations of the policy makers.