National Policy and its effects on the city and residents of a nation

Introduction

Every country in this world requires proper rules and regulations to operate in an efficient way. Government, households, firms; everyone is involved interdependently in running the economic cycle. Firms require households to provide them with factors of production and similarly, households require firms to provide them with goods and services. In this manner, the economic cycle runs and the whole economy involves directly or indirectly to make it run properly or improperly. All the residents and the whole economy affects and is affected by the policies set by the government of that region. In this paper we are going to study about the economic policies and their impact on the residents as well the economy in the Portland - Oregon City.

Discussion

In order to get a comprehensive learning and understanding on the policies adopted by the nation, we are going to elaborate common policies adopted in common by most of the nations.

Fiscal Policy

Fiscal Policy is a policy adopted by the state in order to maintain a proper living standard and economic development of that nation. Fiscal policy deals with proper implementation of Public sector borrowing, Tax collection and Government spending for the welfare of the nation. Some other aspects of fiscal policy also affects individual living such as implementing embargoes, quotas, duties to avoid dumping and imported materials to come in the economy (Daly and Farley, 2011).

The fiscal policy entails how the government spends substantial amount of funds on the domestic economy and salaries of the government employees while major areas of fiscal policy is to affect the government revenues and expenditures for the welfare of the economy and economic growth. Its effects on common man are much more than discussed; details on how it affects the individual in the society and what should one do in order to save himself are discussed below.

There are two major ways of implementing any national policy. Similarly, in applying Fiscal policy, a government may implement it either as Expansionary or Contractionary manner. Expansionary fiscal policy means low government taxes and high spending by the government. The effects of expansionary policy results in increased consumer demand for particular necessary products such as food, houses, medicines, gasoline, rising interest rates and greater budget deficits i.e. imbalance Balance of Payments. The major aim and basic aim of expansionary policy is to increase the market demand for the products so that there is no more market activity in the state. Contractionary policy is the contrast to Expansionary policy. It deals in raising the tax structures and decreased government spending (Easterly & Rebelo, 1993). Using contractionary policy means nation is facing tight economic conditions and require tight/contractionary policies. It results in greater amounts of tax collection from the residents and utilizing it not on the welfare of the nation or for economic growth rather paying off the debt or balancing the Balance of payment. Application of embargoes, import quotas, increased duties come as a result of ...