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Macro Data Report, Fiscal Policies, Monetary Policy Revised
Macro Data Report, Fiscal Policies, Monetary Policy Revised
4.5
3.5
2.5
1.5
0.5
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Unemployment and Inflation 1991-2000
Year Unemployment Inflation Rate(%)
Rate(%)
1991 4.9 2.1
1992 3 2.0
1993 5.8 2.1
1994 8.3 2.4
1995 2.2 2.2
1996 7.0 1.9
1997 3.5 3.2
1998 8.2 2.2
1999 7.6 2.1
2000 4.3 3.4
Effects of Interest Rates Fluctuations on GDP
An increase in interest rates leads to a decline
in demand.
Monetary Policies:
Policiesthrough which it monitors the supply of
money in the economy .
The Fiscal Policy
Fiscal policy was removed via tax cuts, tax reforms and
direct cash expenditures to individuals.
Fiscal Policies Measures 1990-1994
1991: Economic Development and Tax Reprieve Reconciliation Act
Abolished the marriage forfeit
Raised the exception for the Alternate Minimum Tax
Abolished the Inheritance Tax
The terrorist attacks and the raid of Iraq in early 1993 clouded the
economic state in the first part of the decade.
Monetary Policy Contd.
Monetary Policy Contd.
Conclusion
For the ten year period 1990 -2000 the following was noted.
GDP was highest in 1990 the lowest GDP was recorded in 1996, however, the
GDP continued rising from 1996 to 199 where it declined for the case of 2000
The unemployment rates fluctuated constantly with the highest rate
recorded in 1994 and the least in 1995. On the other hand, inflation rates
seemed to fluctuate at constant rates with the highest recorded in 2000 and
the least in 1996.
Government policies have an effect on GDP. High interest rates leads to low
demand with overwhelming supply while low interest results to high
demand which cannot be met by supply leading to inflation.
Wars and other policies on foreign trade affects the rate at which the
country trade with other countries.
References
Belongia, M. T., & Ireland, P. N. (2016). The evolution of
US monetary policy: 2000–2007. Journal of Economic
Dynamics and Control, 73, 78-93.
Williams, J. C. (2016). Monetary Policy in a low R-star
World. FRBSF Economic Letter, 23, 1-23.
Kuttner, K. N. (2014). Low interest rates and housing
bubbles: still no smoking gun. In The Role of Central Banks
in Financial Stability: How Has It Changed? (pp. 159-185).
Van den Berg, H. (2016). Economic growth and
development. World Scientific Publishing Company.
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