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One question is which kinds of industrial policy are most effective in promoting economic development. For example, economists debate whether developing countries should focus on their comparative advantage by promoting mostly resource- and labor-intensive products and services, or invest in higher-productivity industries, which may only become ...
Almost every aspect of government has an important economic component. A few examples of the kinds of economic policies that exist include: [1] Macroeconomic stabilization policy, which attempts to keep the money supply growing at a rate that does not result in excessive inflation, and attempts to smooth out the business cycle.
The Market for Capital (the Loanable Funds Market) and the Crowding Out Effect. An increase in government deficit spending "crowds out" private investment by increasing interest rates and lowering the quantity of capital available to the private sector [sic]. Government spending can be a useful economic policy tool for governments.
Whether an incremental increase to government spending will have a multiplier effect is thought to depend on circumstances in the economy: first, particularly on the extent to which unemployment of resources may be high, so that the additional demand represented by government purchases may be realized by additional production and higher ...
Contractionary fiscal policy, on the other hand, is a measure to increase tax rates and decrease government spending. It occurs when government deficit spending is lower than usual. This has the potential to slow economic growth if inflation, which was caused by a significant increase in aggregate demand and the supply of money, is excessive.
A state-owned enterprise (SOE) is a business entity created or owned by a national or local government, either through an executive order or legislation.SOEs aim to generate profit for the government, prevent private sector monopolies, provide goods at lower prices, implement government policies, or serve remote areas where private businesses are scarce.
The Economic Stimulus Act of 2008, signed on February 13, 2008 by President George W. Bush, was intended to boost the United States economy in 2008. The government of Gordon Brown in the United Kingdom was the first government to enact fiscal stimulus in the aftermath of the Great Recession, including £3 billion worth of investment spending ...
Regulatory economics is the application of law by government or regulatory agencies for various economics-related purposes, including remedying market failure, protecting the environment and economic management.