Course code| PADM 5111
Name of course| Economics and General public Finance
Lecturer| Mr Dikgang Motsepe
Assignment question| Discuss the function of financial policy in stabilizing our economy, with reference to applying taxes and government expenditure| Assignment turn in date|
Student Name| Mcebisi Mayeza
Student Number| 528596
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The purpose of this essay is always to discuss how government formulates and implements its coverage regarding the financial activities, in an attempt to promote stability in the economy. Such a policy is known as financial policy. The discussion will be based on the government spending budget as the main instrument designed for outlining focal points and spending plans, and outlining loans of government spending, mainly through taxation, for any financial season.
Fiscal coverage may consequently be defined as the use of federal government expenditure and revenue collection to influence the economy.
Philip Mohr, John Fourie and associates (1995) define fiscal policy while government decisions about " how much to pay, what to dedicate it as well as how to financing its expenses. вЂќ
Iraj Abedian and Michael Biggs (1998) point out that you of the basic functions from the budget is always to allocate available public solutions in support of government's planned objectives over a certain time period.
This kind of essay will never explore different ways of loans government spending such as income from house and funding, but will confine itself to the use by simply government of its costs and taxes to strengthen the economy. This essay will never explore other ways of funding government spending such as profits from house and credit, but will restrict itself to the use by government of its spending and income taxes to strengthen the economy.
Influence on the economy
Lately the level of government activity throughout the economy has been quite significant, with an ever-increasing trend, constituting upwards of fifty per cent of major domestic item (GDP) in developing financial systems like S. africa. It is for that reason that modifications in our level and composition of taxation and government spending have a significant significant effect on the monetary activity.
The Business Circuit
Alternating circumstances of basic downturn, termed as a downturn, followed by quick expansion throughout the economy, referred to as a boom, generally occur in the economy. These are termed as business circuit or cyclical conditions. Government's objective should be to maintain an increased but lasting economic progress rate.
Government will therefore get involved in recessionary or rate of growth conditions in order to counteract the economic condition prevailing and influence our economy towards the essential growth way.
Expansionary monetary policy
Much more general recession in the amount of economic activity, governments will certainly...
References: 1 ) Philip Mohr, Louis Fourie and acquaintances. (1995) ECONOMICS for Southern African Pupils: Chapter 16 Pp 435.00 вЂ“ 477
The general public Sector: Truck Schaik Writers
2 . Iraj Abedian and Michael Biggs. (1998) MONETARY GLOBALISATION AND FISCAL POLICY: Chapter 14 Pp 434 вЂ“ 476
Budgeting-system reform: a precondition intended for effective fiscal management: Oxford University Press
3. " http://en.wikipedia.org/wiki/Fiscal policyвЂќ