Fiscal Policy and Aggregate Demand in the UK Essay

Fiscal Policy and Aggregate Demand in the UK - canvass ExampleSimply, the monetary policy of the authorities is to control the liquidity balance in the economy affect the movement of the macroeconomic variables by adjusting interest rates. On the other hand, pecuniary policy is an attempt of the government for influencing the economic activity by changing the level and rate of taxation and government expenditure. (Grant and Vidler, 2000, pp 165-167).In the UK, edge of England is responsible for controlling and directing monetary movement in the economy with the monetary policy. The Bank of England has the government agency to set the rate of interest independently along with requirements. In case of pecuniary policy, the government itself has taken important steps in strengthening the fiscal policy framework since taking office. The government directs the fiscal policy decisively and confidently for sustaining medium-term public finances based on the authoritarian rules and r egulations. If possible the fiscal policy supports the monetary policy regarding the movements of the economic and financial parameters of the country. This balancing approach of the fiscal policy together with the monetary policy endows with the stage of solidity essential for accomplishing the Governments fundamental economic purpose of providing a juicy and sustainable growth and employment in the economy.