Macroeconomic Essay Example | Topics and Well Written Essays - 3000 words

Macroeconomic - Essay ExampleIn addition, BBC News disdain (2011) asserts that there is a high rate of unemployment in the United estate that requires the government to take comprehensive measures if the situation is to be reversed.The united kingdom government has taken some fiscal and monetary policy measures in an take in charge to reverse the economic situation. According to Warrell (2012), the government has reduced its spending by outsourcing security and other services from private firms as one of the chief fiscal policies. However, several stakeholders claim that the government is not doing enough, and the Institute of Directors is calling for further cuts in public spending, and reduced taxation, which is the other approach to fiscal policy (OConnor, 2012).In addition to the above mentioned fiscal policies, the United Kingdom government has taken key monetary policy approaches including inflation targeting and quantitative easing. According to BBC News business organisat ion (2012a), the central bank lowered the modest lending rates in order to encourage banks to lend more to individuals and corporations however, despite a low base lending rate of 0.5 percent, banks did not increase their lending and the central bank may raise the rates to 0.75 or 1 percent. According to BBC News Business (2012b), the Bank of England decided to use quantitative easing as the other monetary policy approach in order to reverse the economic situation. In early 2009, the bank injected 75 one million million into the economy, which had increased to 200 billion by the end of that year. In October 2011 and February 2012, the bank added 75 billion and 50 billion respectively to bring the total amount injected into the economy using the quantitative easing approach to 325 billion.The United Kingdom reduced its expenditure in an try out to redeem the national economy and pay of its debts, which is a more preferable approach as compared to the other viable option of increa sing taxation.