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Where budgeting procedures do not distinguish between capital and current transactions, the proceeds of privatization sales provide a once-and-
for-all boost to revenues. Another explanation is that the consumers spent a larger part of their disposable income than they had been observed to
do in the s, upsetting some of the statistical projections based on empirical data from those years. Since spending and taxes are controlled by the
president and the Congress, these elected officials played a leading role in directing the economy. Figure III shows the average net change in total
employment in and following years government employment increased or diminished. Often wage increases that are made in the normal collective
bargaining process are greater than the increases in labour productivity or output per man-hour ; such wage increases tend to increase the cost of
production and to force prices upward. Broker Reviews Find the best broker for your trading or investing needs See Reviews. In recent years,
governments, discouraged by past failures with fiscal manipulation, have turned to monetarist policies to attempt control of the economy. There are
also a variety of political inhibitions against taking action. Table IV shows that higher growth and better stock-market performance occur when the
Federal Reserve creates less rather than more money! Another type of suggested adjustment recognizes that inflation erodes the real value of
public debt. There have been experiments, therefore, with other forms of regulation, which seek to strike a balance between incentives for better
performance and the ability to exploit consumers. The dismantling of such restrictions is seen as one method of improving the efficiency of state
concerns. Stabilization became a less important policy goal and one that governments were increasingly unable to achieve. Make a list of these
activities on the chalkboard. During the later 20th century there was an increasing tendency to employ fiscal policies in the short run, partly in order
to assist monetary policy in solving cyclical problems. However, it could now also debase the coinage and so increase the money supply. And
nothing depletes vitality more than uncertainty or fear. Many governments have been confronted with exactly this choice of alternatives. When the
danger of recession appeared most serious, government sought to strengthen the economy by spending heavily itself or cutting taxes so that
consumers would spend more, and by fostering rapid growth in the money supply, which also encouraged more spending. The conflict between full
employment and price stability seems to arise in two different sets of circumstances. A fall in the dollar results from fiscal policy the growth of debt
shown in Table I and monetary policy the growth of the monetary base shown in Table IV. Expanding our Nation's Infrastructure through
Innovative Financing. Economists have sought to provide objective criteria for public expenditures through the so-called theory of public goods. At
this extreme level of simplicity, output, input, income and spending can be viewed, similarly, as four sides of the same square! It may specify
minimum wage levels or control the siting of new ventures and the activities of existing ones. Citizens, interest groups, and political leaders disagree
about how large a scope of activities the government should perform within each of these functions. Please help improve this article by adding
citations to reliable sources. Data and Charts Center. The development of countercyclical fiscal policies in the post-World War II period reflected
the explicit attempt by some governments to protect their population from world recessions by deliberately spending additional money at
appropriate times. In this sense, easy monetary policy stimulates inflation but not growth. Although, in certain limited areas of telecommunications,
competition is possibleand has been allowed to develop in both the United States and Britaintechnical and legal restrictions inhibit
competition in many sectors of the industry. Our program runs year round with three sessions: Relationship between the Economy and Other
Macroeconomic Policies. Take this Political History True or False Quiz at Encyclopedia Britannica to test your knowledge of parliamentary
democracy, feudalism, and other forms of government. All agree that something is seriously wrong, but theories as to what the problem might be
range from one extreme to another.