Explain how this fiscal policy would impact the economy
Course:- Macroeconomics
Reference No.:- EM13863922

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Project Task:

Open the link:


article: "IMF sees UAE GDP growth slowing to 2.3 % in 2012"

1. Summarize the articles with your own words.

2. Which stage in the business cycle do you think the economy is in?

3. Give two reasons to defend your chosen business cycle.

4. Identify the right fiscal policy that should be followed: contractionary or expansionary.

5. Explain why this fiscal policy should be used.

6. Explain how this fiscal policy would impact the economy.

7. Analyze how the information provided in the article will impact the macroeconomic indicators. You should use two indicators: output and unemployment in your analysis.

8. Follow the below instructions within your writing the project.

Working Guidelines for Term Project:

A. Project Structure:

It is recommended that your project report have the following structure in the order provided here.

1. Title page

The students' details should be filled in the cover letter provided.

2. Abstract / Executive Summary

The Abstract consists of the project title and about half a page concise summary containing the scope and results of your study.

3. Acknowledgements

In this part, you award thanks to those who have been of useful assistance during your project.

4. Table of Contents

Table of contents should contain titles and page numbers for the main sections and subsections of your report. The table of contents should also include entries for any appendices in your report.

5. Report Body

This is the central and main part of the project which contains the actual work done during the project. The main requirement is that you need to structure the report so that it is clear and structured in a way that makes sense. Grammar and spellings count.

6. Conclusions

The project's conclusions should list the things which have been learnt as a result of the work you have done.

7. Appendix

Appendices should be used for all additional supplementary materials. For example: survey data, interview summaries, diagrams or graphs. Individual appendices are lettered (e.g. Appendix A, Appendix B, etc.)

8. References

You are responsible for appropriately citing material and methods that you use. Give references for the data collected from a text book, a magazine or a website identifying its sources while using the appropriate form. In the references section, references should be in a numbered list, ordered alphabetically by the last name of the first author.


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In this paper, we have highlighted the economic conditions of the UAE economy past GFC where there was fiscal expansion to bring the economy back out of recession. This has brought the economy back on recovery path and reduced its dependence on the oil sector alone as its major contribution to GDP which has reduced to the extent of 25% from above 60%. The policy makers have shifted their focus from fiscal expansion to one of fiscal consolidation which is argued against in this paper.

Table of Contents:
Abstract: 2
Table of Contents: 2
Introduction: 3
Summarizing the article: 3
Business cycle in UAE: 3
Business Cycles Phases: 4
Two reasons that UAE is in recovery stage: 5
Expansionary fiscal policy effects on employment and output: 6
Fiscal Expansion: what it is? 6
Consequences for Demand and Output 7
Impacts on Employment 7
Long-Run Fiscal Contraction 7
Recessionary Gap 8
What is happening in UAE? 10
Conclusion: 11
References: 12

This paper discusses the article “IMF sees UAE GDP growth slowing to 2.3 % in 2012” and analyses the current policies of the UAE government during the years since the global financial crisis. This paper has many parts which introduce the debt crisis that affected UAE’s economy during the GFC, the initiative took by the UAE government and monetary authorities, the current business cycle of the UAE in 2012 and the later years, and whether the contractionary fiscal policy adopted by the UAE in 2012 is apt at for the business cycle and the effect of the contractionary fiscal policy on macroeconomic indicators of UAE namely output and employment.

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