Please enable JavaScript.

Coggle requires JavaScript to display documents.

Macroeconomic policies - Coggle Diagram

- - - - if the economy is in a recession then the boost in ad will reduce cyclical unemployment
    - - its not the govs job to control inflation (central banks)
    - - if the economy is sluggish or in a recession
    - - reduction in coporation tax
      - increase in government spending
      - reduction in income tax
  - - - reduces demand pull inflation
    - - higher tax on the wealthy
    - - less imports due to less spending money
- - - - borrowing is more expensive - less investment funded by borrowing
      - lesss profits. less investment
    - - increased revenue - hot money inflows
      - high
    - - less spending by borrowing (houses, furniture, cars)
      - increase in variable-rate mortgages - higher debt repayments, less disposable income therefore less spending
      - reward for saving goes up therefore increased saving decreased spending