Economic Policies What is the Fiscal Policy Essay

Introduction Economic policies are aimed at finding satisfactory solutions to various problems that emerge from time to time in any economic system. In most instances, the so called problems present themselves in the form of inflation, unsatisfactory or poor economic growth and unemployment. It is not always simple and straight forward to solve such dilemmas, especially because their impact, implications and importance changes from time to time. (Roux, 2008). Making use of the monetary policy and the fiscal policy, the South African government has made efforts to address growth and poverty in the country. The National Development Plan (NDP) and the National Growth Plan (NGP) are two strategies that have been designed by the government†¦show more content†¦The cost, efficiency and capacity of the national logistics system was also identified as an area of concern. From a market perspective barriers to entry and limits to competition were pin pointed. The fiscal policy component used in hopes of promoting growth was government expenditure. The Bulk of the funds made available would go to the building of provincial and local roads, housing, schools, business centres and sport centres. Government centres in the form of police stations and courts were part of the plans. In order to curb unemployment, education and skills development were at the fore. There was a shortage of skilled labourers in the market. The areas where education for these skills would be funded were engineering, scientists, managers, artisans and IT technicians. (Roux, 2008) What is the monetary policy? The monetary policy is a strategy that the South African Reserve Bank uses to control the demand for money as well as the supply of money in order to achieve certain goals. The interest is one tool used to control the borrowing and lending of money. Therefore the main elements of the monetary policy are the interest rate, the actual supply of money through the banks and credit extensions to those borrowing money. â€Å"Before the monetary policy changes in South Africa are considered, all the role players will be consulted through the Monetary Policy Forum (MPF) (Janse van Rensburg, McConnell, Brue, 2011). The South AfricanShow MoreRelatedFiscal Policy And Fiscal Policies1560 Words   |  7 PagesFiscal Policy Brooks (2012) defines that fiscal policy is adjusting government revenue and spending in order to influence the direction of the economy and meet the economic goals of the country. The two main tools in fiscal policy are taxes and expenditure. Fiscal policy is set by the government and parliament and often used a combination with monetary policy, which set by Reserve Bank of Australia as an example. 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