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Home/Business & Economics/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. What specific fiscal policy tools does the government have available, and how should these tools be utilized to maximize their effect in stabilizing the economy?

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. What specific fiscal policy tools does the government have available, and how should these tools be utilized to maximize their effect in stabilizing the economy?

The first fiscal policy tool that can be used in facilitating economic stability in the country is tax reduction. Tax reduction will leave the citizens with more money to spend on purchasing the available products in the market, thereby increasing demand and creating a consequent increase in product value. The second appropriate fiscal policy tool that can enhance economic stability in the country is increasing government spending. Suppose the government increases its spending on public services and infrastructural development. In that case, more money will be injected into the economy, and disposable income will increase.

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Academic.Tips. (2022) '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. What specific fiscal policy tools does the government have available, and how should these tools be utilized to maximize their effect in stabilizing the economy'. 3 November.

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Academic.Tips. (2022, November 3). 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. What specific fiscal policy tools does the government have available, and how should these tools be utilized to maximize their effect in stabilizing the economy? https://academic.tips/question/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-t-3/

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Academic.Tips. 2022. "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. What specific fiscal policy tools does the government have available, and how should these tools be utilized to maximize their effect in stabilizing the economy?" November 3, 2022. https://academic.tips/question/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-t-3/.

1. Academic.Tips. "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. What specific fiscal policy tools does the government have available, and how should these tools be utilized to maximize their effect in stabilizing the economy?" November 3, 2022. https://academic.tips/question/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-t-3/.


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Academic.Tips. "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. What specific fiscal policy tools does the government have available, and how should these tools be utilized to maximize their effect in stabilizing the economy?" November 3, 2022. https://academic.tips/question/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-t-3/.

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"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. What specific fiscal policy tools does the government have available, and how should these tools be utilized to maximize their effect in stabilizing the economy?" Academic.Tips, 3 Nov. 2022, academic.tips/question/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-t-3/.

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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. What would be the likely impact on the government budget and national debt of the use of the fiscal policy tools?
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. What kind of fiscal policy might be helpful to stabilize the economy (expansionary or contractionary)?
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