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Home/Business & Economics/Assume that in a hypothetical country, coal mining is a significant industry, hiring a high proportion of that country’s workforce. Describe how a significant decline in coal mining, as the country attempts to switch to environmentally safer production, can ripple through the entire economy and how the government can use fiscal policy tools to combat such adverse effects.

Assume that in a hypothetical country, coal mining is a significant industry, hiring a high proportion of that country’s workforce. Describe how a significant decline in coal mining, as the country attempts to switch to environmentally safer production, can ripple through the entire economy and how the government can use fiscal policy tools to combat such adverse effects.

Considering that coal mining is the source of income for most people in the country, its economy is dependent on money from coal mining. An abrupt drop in coal mining will result in high unemployment rates, leading to a significant decrease in cash circulating in its economy. The demand for consumable and durable products in the country will drop substantially as consumers’ affordability will be low due to declining income. Nevertheless, coal mining, which is the country’s main economic activity, is also a major source of income as tax for the individual coal miners and the employees is high when the volumes mined are high.

Therefore, the government’s income will drop, and deficits in the budget will emerge. In addition, the government will need money to top up the shortages. An expansionary fiscal policy also would be effective for the country in an attempt to stabilize its economy. Moreover, the government can increase its spending on infrastructural development, among other projects, so that it can release more money to the deteriorating economy. Expanding cash circulating in the economy will increase demand for products and products’ value, hence destabilizing the economy.

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Academic.Tips. (2022) 'Assume that in a hypothetical country, coal mining is a significant industry, hiring a high proportion of that country's workforce. Describe how a significant decline in coal mining, as the country attempts to switch to environmentally safer production, can ripple through the entire economy and how the government can use fiscal policy tools to combat such adverse effects'. 3 November.

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Academic.Tips. (2022, November 3). Assume that in a hypothetical country, coal mining is a significant industry, hiring a high proportion of that country's workforce. Describe how a significant decline in coal mining, as the country attempts to switch to environmentally safer production, can ripple through the entire economy and how the government can use fiscal policy tools to combat such adverse effects. https://academic.tips/question/assume-that-in-a-hypothetical-country-coal-mining-is-a-significant-industry-hiring-a-high-proportion-of-that-countrys-workforce-describe-how-a-significant-decline-in-coal-mining-as-the-country-a/

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Academic.Tips. 2022. "Assume that in a hypothetical country, coal mining is a significant industry, hiring a high proportion of that country's workforce. Describe how a significant decline in coal mining, as the country attempts to switch to environmentally safer production, can ripple through the entire economy and how the government can use fiscal policy tools to combat such adverse effects." November 3, 2022. https://academic.tips/question/assume-that-in-a-hypothetical-country-coal-mining-is-a-significant-industry-hiring-a-high-proportion-of-that-countrys-workforce-describe-how-a-significant-decline-in-coal-mining-as-the-country-a/.

1. Academic.Tips. "Assume that in a hypothetical country, coal mining is a significant industry, hiring a high proportion of that country's workforce. Describe how a significant decline in coal mining, as the country attempts to switch to environmentally safer production, can ripple through the entire economy and how the government can use fiscal policy tools to combat such adverse effects." November 3, 2022. https://academic.tips/question/assume-that-in-a-hypothetical-country-coal-mining-is-a-significant-industry-hiring-a-high-proportion-of-that-countrys-workforce-describe-how-a-significant-decline-in-coal-mining-as-the-country-a/.


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Academic.Tips. "Assume that in a hypothetical country, coal mining is a significant industry, hiring a high proportion of that country's workforce. Describe how a significant decline in coal mining, as the country attempts to switch to environmentally safer production, can ripple through the entire economy and how the government can use fiscal policy tools to combat such adverse effects." November 3, 2022. https://academic.tips/question/assume-that-in-a-hypothetical-country-coal-mining-is-a-significant-industry-hiring-a-high-proportion-of-that-countrys-workforce-describe-how-a-significant-decline-in-coal-mining-as-the-country-a/.

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"Assume that in a hypothetical country, coal mining is a significant industry, hiring a high proportion of that country's workforce. Describe how a significant decline in coal mining, as the country attempts to switch to environmentally safer production, can ripple through the entire economy and how the government can use fiscal policy tools to combat such adverse effects." Academic.Tips, 3 Nov. 2022, academic.tips/question/assume-that-in-a-hypothetical-country-coal-mining-is-a-significant-industry-hiring-a-high-proportion-of-that-countrys-workforce-describe-how-a-significant-decline-in-coal-mining-as-the-country-a/.

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Assume that it is now early February 2003. Provide strategic advice to the new CEO and Board of McDonald’s by answering the following question: List three vital accounting and finance problems facing McDonald’s.
The economy of a hypothetical country has been stable for two or three years with very low unemployment. Wages have been gradually increasing during this time. Now an aggressive policy of increasing tariffs on foreign goods imported into the country results in retaliatory actions from the other countries against the hypothetical country's products and services. This causes a great loss of business in the hypothetical country and results in significant unemployment. How will the use of the fiscal policy tools stabilize the economy?
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