Recession in the economy Essay Example | Topics and Well Written Essays - 500 words

Recession in the economy - Essay ExampleHence, countries are expected to come up with various macro and microeconomic policies that goading positive growth so that their economies can recover from the menace. Such is the case in Poland if they indigence to redeem the situation. Consumption forms a critical development criterion in any economy and the advance must find measures to spur the vice. The government should first reduce taxes on the basic goods and services as it would reduce the prices of the commodities. Consumers willing increase the number of consumption bundles and have an extra income that they can spend on other goods. As a result, the consumption patterns increases that bring more than money to manufacturers that they can invest and spur growth in the country. Another measure is by the Poland government to provide subsidies to the producers. The manufacturers cost of operations will be decrease hence making cheaper commodities (Auerbach, Alan and Yuriy, pg 15). This insurance policy will translate into low prices of goods and services in the market that will reduce inflation. High consumption results in more sales that lead to high school revenues. The firms can hence invest the excess income making them expand and, as a result, hire more workers that reduce unemployment in the economy. Through the central bank of the country, the benchmark lending interest for loans should be reduced to commercial banks. The reduced mortgage rates would be passed to consumers and investments in the form of reduced lending by the commercial bank. More persons and firms would acquire the loan services that they invest in major parts of the country. The policy is necessary because the interest rate is inversely related to investments levels. The higher the interest rate, the lower the investment and the diametric are right (Auerbach, Alan and Yuriy, pg 18). Therefore, due to low rates, investors will expand their production that increases the level of ou tput at heart the economy. The increased production makes the gross domestic products to raise that makes the country have a favorable treat balance with her business partners increasing economic growth in the country.