Controlling fiscal and monetary policy

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Question

By controlling fiscal and monetary policy, the government has an impact on companies, as does its authority to create and rescind restrictions on how firms may function. The government may have either a direct and an indirect impact on numerous markets and businesses by combining these regulatory tools. The government uses monetary policy to raise lending rates to organizations in an effort to restrict the money supply, which has a negative impact on the aims of such organizations since they cannot invest. Fiscal policy is used by the government to raise taxes, which means that any transactions done by the business will be taxed at a high rate, which will have a negative impact on the organization's aims. For example, the government may impose tariffs and quotas on imports and exports to exert direct control.

Reference no: EM134019663

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