What Does The President And Congress Do To Stimulate The Economy?

The President And Congress Do To Stimulate The Economy

Introduction

Economy stimulation and contraction can mean different thing to many people. Some will say that at stimulation, there is enough money in the economy, high employment etc. On the other hand, the contraction means the low levels of employment. However, in these entire economic situations no matter how pressing or promising it may look; they all come to an end. Therefore, it is a cycle that comes as a result of leveling the economy to its normal state.

The president and congress on stimulation and contraction the economy

The president and the congress can determine the nature of the economy through implementation of various things in the respective government. However, the strategy to be implemented has to affect the whole country in that everyone who’s that economy gets affected. There are various ways that a president can use to stimulate economy.

It is believed that the president can set the mode in which encourages the congress to pass law as that can affect the economy. If he convinces the congress to raise taxes, raise the tariffs as well setting very many regulations about business, he creates a very hostile environment for investors to work in, therefore, the economy declines as a result of less investor, unemployment rates.

On the other hand, if the president creates a friendly environment, he/she encourages the congress to implement laws that lower the levels of taxes, and encourage more investors on investing in various businesses. As a result, the level of employment raises and the economy get stimulated.                         

The Federal Reserve on how it stimulates and contracts the economy

Even with the abilities that the president has when it comes to stimulating the economy the Federal Reserve maybe has the greatest ability to influence the economy. It is said that even with the president of the country being among the people who encourage enterprise as a form to stimulate the economy and the congress with their effect when it regulates taxes and tariffs all this will be thwarted if the federal reserve is pursuing the harmful policy concerning monetary value and still pursues harmful policies that are there.

What motivates policymakers to stimulate the economy or contract the economy?

As it was explained earlier, there are a number of factors that can make the economy to be stimulated or not. Policy makers such as the congress cannot pass laws regarding economy without a cleat reason of doing so. Therefore if the situation at a state economy demands attention, thus the policy makers will have a say on it. High rate of inflation, high rate of unemployment triggers the policy makers to command low interest rates that enable more people to borrow money and invest.  On the other hand, when the economy has more than it holds, the policy makers raise the level of interest rate and discourage investors from investing.

Federal Reserve views about its policy goals

The Federal Reserve has goals that were initially established by the U.s Congress in the employment act of 1946. These includes: stability in the financial system, price stability, economic growth, rate of interest stability, full employment and currency stability. (University, 2015)

There are some of the goals that the federal always have a press on. These affect the economy highly in nearly all the sectors. For example, the federal has major concern upon stabilization of the financial system. They believe that a stable financial system is what helps the businesses to be finance, students to get loans consumers to access credit cards and much more. Interest rate is another thing that the federal is really focusing on. This is because the today’s prices are determined by the foreseen interest rates in future. Therefore, when the interest rates are stable, the economy thrives because the future is easily planned. Contrary, when the rates are unstable, it becomes very challenging for business, individuals as well as the government to plan the economy which resultantly leads to economic decline. Illustrating, Janet L. Yellen, the Federal Reserve chairwoman, addressed the federal meeting upon the interest rate this year 2016. She says that there are no expected increased interest rates that will likely be announced on the next Aprils meeting therefore the federal is expected to watch a careful and patient course towards higher interest rates for economy improvement.

Federal Reserve says about the strength of the economy

According to Ms. Yellen, a strong economy has a very positive impact to the nation because it is able to cover up any negative spillovers through capital flows that are known to decline the economy. She said that due to the federals first increase in interest rate for a span of nearly a decade. “This action takes place in the context of a US economy that is doing well, and is a source of strength to the emerging markets and other economies around the globe,” she complimented.(Moneybeat, 2016)

Effects of strength of other economies outside of the U.S.

The strength of other economies has a greater impact in our organization following that they are involved in the global market. A strong economy in other countries will attract massive investors to invest in the respective countries therefore posing a threat to the US.  According, to the report given on September 17th 2015 by the central bank, the recent global economic as well as the financial developments are prone to restrain the economic activities and causing auxiliary downward pressure on inflation by then.

Recommendations on competitive strategies or supply chain

An organization has an ability to create a non-competitive environment around it due to the strategic competition strategies that they put in. in my organization, there were strategies that were used before to help it be sustained in the market competition. These included lowering the supplier cost, converging of strength on specific areas, together with providing segregated capabilities. However, following today’s economic status and completion, the organization decided to come up with more competitive strategy.  The organization should enhance and focus on advanced communication to customers, suppliers, employees etc. this will enable them to know some of the issues raised, complaints and where to improve the quality of goods and services. Access to third party logistic barriers helps the organization to focus more on the security regarding it good. Moreover, the advanced inventory and distribution center technology enables the quality product and services.

Enhancing a sustainable competitive benefit in supply chain on the other hand requires a high level of focus on company’s value. The supply chain this organization should be treated as a value chain where all the participants are entitled to one goal, vision and mission. Every process involved should include valid information and ideas that are passed to each and every employee and management. Total supply chain can be maximized by high level of participation by every member (Dittmann, 2013).

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