Analyse and Evaluate the significance of Fiscal Policy rules and Fiscal Policy targets and constraints in promoting Economic Growth, Economic Stability and International Competitiveness

The first 200 words of this essay...

Analyse and Evaluate the significance of Monetary Policy rules and Monetary Policy targets and constraints in promoting Economic Growth, Economic Stability and International Competitiveness

L1. Monetary policies are where the government use changes in the base rate of interest to influence the rate of growth of aggregate demand, the money supply and ultimately price inflation.

In the short run economic growth is an increase in real GDP, In the long run economic growth is an increase in productive capacity (the maximum output an economy can produce)

Economic Stability - the avoidance of volatility in economic growth rates, inflation, employment and unemployment and exchange rates.

International Competitiveness - The ability of an economy's firms to compete in international markets and, thereby, sustain increases in national output and income.

L2. Monetary policies can be used to promote economic growth, Economic (this stability reduces uncertainty, promotes business, consumer confidence and investment) and International Competitiveness. This causes an ? in AD, which can be good for an economy. For example if a Government ? interest rates, people will have an ? in disposable income, because payments on credit cards will ?, mortgage payments will ? and it is