Fiscal Policy and Its Implications in Belgium Assignment

Fiscal Policy and Its Implications in Belgium - Assignment ExampleThe brass may also choose to increase its own spending and with this, jobs be created, an element that lowers the unemployment rate. Briefly, Fiscal policy is a major driver of the nations economic performance. authorities spending would include the purchase of goods and services. Since it has the power to lower or rise, real GDP It qualifies to be a fiscal policy tool. The government piece of tail influence economic output if it adjusts its spending. Apart from the effect of government spending on the prudence, it also affects businesses dealing with goods and services bought by the government thus multiplying through the economy (Moller, 52). The GDP may be stimulated if consumers spend the paychecks they earn from their businesses. When those dealing with government vehicles receive whacking orders, their sales tend to increase. This pull ins them hire more employees who in turn earn paychecks from the compani es. The employees then spend this bills on goods and services thus increasing spending, leading to a much greater result. This effect is called the multiplier factor effect.The changes that occur in taxes affect the average consumer income, and changes in consumption leading to changes in real GDP. These make it a fiscal policy tool. The government fire influence economic output by adjusting taxes. They can be changed in several ways, and these include raising or lowering marginal taxes. Secondly, the tax rules can be modified or eliminated (Modigliani & Johnson 34).These include social security, welf ar or unemployment checks. On a monthly basis, the checks go out all over the country thus serving as the income for millions of consumers. As in taxes, changes in transfer payments also leads to changes in consumer income. When consumers spend most of their income, they influence the economic output.These three tools are the ones that the government mostly administers to the econom y to help it in the short term.