MOVING from Contractionary Fiscal & Monetary Policy to Expansionary Monetary Policy & Contractionary Fiscal Policy
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Contractionary Monetary Policy & Fiscal
Policy results in
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Higher Interest Rates, Lower Spending by the
Private & Public sector as a result Lower production which finally
results into Lower GDP.
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Indian Government trying to shift from
Contractionary Fiscal & Monetary Policy
to
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Contractionary Fiscal Policy & Expansionary Monetary
Policy results in
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Lower Interest Rates, Lower Spending by the Public sector, Comparatively good
sepending by the Private Sector but Output varies as a result instability with the GDP.
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Expansionary Monetary Policy &
Contractionary Fiscal Policy
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Contractionary Fiscal Policy are also sometimes referred as Tax Terrorism, if it is politically motivated.
Effects of Expansionary Monetary Policy are more effective when it is mingled with Expansionary Fiscal Policy.
But at the same time it's good to note that Inflation is just in the initial level of WALKING INFLATION & there is not much deviation of actual from the standard one from last 4-5 months.
*MENTORS can correct, If I am wrong some where* :)
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