Should monetary and fiscal policymakers try to stabilize the economy Essay

Should monetary and fiscal policymakers try to stabilize the economy - Essay Example Also, there is no reason to make people live through the ups and downs that is the business cycle as we know it, and monetary and fiscal policymakers can step in to try to balance out demand, and hence forth stimulate production and employment (Lecture 19). Some people may argue that this is only looking at the "short" run effects, and not taking into consideration the long term effects. Such people would not agree with monetary and fiscal policymakers interfering in the economy, they would rather see less big involvement and a monetary policy based on long term rules(The Short). "Fiscal or monetary policy can be used to stabilize output and employment around their trend levels, and hence prevent booms or recessions from getting out of hand. When this domestic model is broadened to open the economy to international trade and capital flows, this conclusion no longer holds but the results depend on the flexibility of the nation's exchange rate."(Remarks). In conclusion, after studying and reading several sources, I have decided that monetary and fiscal policymakers should try to stabilize the economy. This offers a solution to many economic problems, and can help prevent massive swings in our economy, which is always a good thing.

Finance international business Research Paper Example | Topics and Well Written Essays - 2500 words

Finance international business - Research Paper Example This includes manufacture ring, processing, buying, transportation, warehousing etc. Pre-shipment credit is also called as packaging credit in some countries. This is short term finance. Post shipment finance is the credit offered to the importer in order to buy goods. Not all exporters are financially sound to extend credit to the importer. In order to encourage importers financial assistance is offered to them. This is done through financial institutions, commercial banks especially. Under the consignment terms of purchase the importer makes payment to the exporter only when the goods are sold to the end user and payment is received from them. This type of purchase poses high risk to the exporter as there could be indefinite delay in the sale of goods to the end user. It however favors the importer. This type of payment is observed in case of very high trust among the traders or if the exporting firm is financially capable enough to incur the loss, if there is any. The name clearly suggests the feature of this financing option. The importer has to pay in advance to receive the goods. In other words the payment is done before the shipment of the goods. Again, there are a few reasons for choosing this option. The importer is yet to establish a name in the market or the exporter has little faith in the financial status of the importer. The high demand of the product could be another reason for opting this mode of payment. The Cash-in-Advance type payment poses high risk to the importer. This financial instrument poses equal amount of risk to both, the importer and the exporter. The importer has to pay a certain part of the payment in advance to initiate the trade. The down payment is paid at the time of signing the contract or shortly thereafter. The risk involved for the exporter is that the importer may not pay after receiving the goods. Similarly the exporter may not deliver the goods after receiving the down payment. Hence, the risks are