Policies to revive an economy
The COVID-19 global pandemic is effecting and threatening to bring down international trade. Countries need to promote economically structural support policies that improve the economy and speed up global economic growth recovery. Several recommendable plans can be put in place to facilitate a smooth economic recovery. One of the policies that countries should use for economic recovery is a shift to low carbon and affordable energy strategy. The strategy will also enable economies to implement transport systems that will bring them long-lasting financial benefits. The policy will not only revive the economy but also help in combating air pollution. A stimulus package is another strategy that governments can take to revive their economies smoothly. The economic stimulus packages will help countries to create jobs and prevent further economic downfall after recovery. Additionally, states can also use fiscal policy levers to pull up the international economy and improve the asset markets. tFiscal policies have economic a multipliers impact on economic growth because it stimulates an increase in demand. Implementation of the budgetary policy in the form of investments can lead to a smooth economic recovery both at the country and global level. The useful application of fiscal policies in the rescinded economy can stimulate economic recovery. The strategy is essential in sustaining market returns, which stimulate economic growth. The stimulus packages and fiscal policies are great commercial tools that are useful for speedy economic recovery.
Policies to stimulate demand
The strategies that encourage demand aim at increasing the overall need for goods and services. Several factors affect aggregate demand like; government spending, investment, net exports, and consumer spending. The government can lower tax rates on workers to encourage people to buy more. A lower tax policy implies people will have more to spend on goods and services. A tax cut allows people to have surplus money that they can use to buy more products and services. The policy will increase the demand for products and services. Economists believe that when customers have extra cash in their pockets, they spend more. The government can put restrictive price strategies that regulate the prices of goods and services. The restrictive price measures also ensure that the cost of some goods does not exceed a specific set amount. When prices of products and services are relatively lower, consumers are able a high buying power, leading to an increase in demand. Fiscal policies like government spending can also increase the aggregate demand in an economy. Government spending leads to more jobs for people and improves their order since they have the cash to spend.
Policies to stimulate supply
Supply-side policies are useful for the stimulation of production in companies. One of the strategies is tax cuts on the number of products. The government can reduce taxes on transportation of goods and services to encourage suppliers to transport more goods to wholesalers at a lower price. Government supplements on the production of some products and services can also increase supply. Economists believe government supplements are one of the critical factors that affect the change of quantity. The incentives help companies to produce more products and expand their supply operations. Tax cuts on companies in the product supply chain can also stimulate an increase in the supply of goods and services. The companies are also able to explore more areas of investment and growth. Corporate tax reductions are also another policy that increases supply in an economy. The strategy aims at ensuring that companies have more money to employ more workers to increase output production. The funds can also be useful to companies who wish to invest in capital tools to enable the processing of more products. The practical application of various supply-side policies can result in an increase in employment opportunities and increase supply. Companies will have enough incentive to motivate employees to work towards increasing the overall output.