Managing the Economy Research Paper Example | Topics and Well Written Essays - 1500 words

Managing the Economy - Research Paper ExampleBasic Income valuate Rate (% points) 23.0 23.0 23.0 23.0 23.0Real Income Tax Allows (Index, 1995=100) 100.0 100.0 100.0 100.0 100.0VAT Rate (% points) 17.5 17.5 17.5 17.5 17.5Employers NICs Rate (% points) 10.0 10.0 10.0 10.0 10.0 matter to Rates (% points) 6.2 6.0 6.0 5.4 4.1Real Unemp. Benefits (Index 1995=100) 100.0 100.0 100.0 100.0 100.0DM / Exchange Rate 2.67 2.63 2.58 2.55 2.55 SETTING OF MAIN POLICY INSTRUMENTS IN THE REVISED FORECAST 1999 2000 2001 2002 2003Govt Capital Expdt ( bn,1995 prices) 10.1 11.2 12.7 14.4 15.0Govt Current Expdt ( bn,1995 prices) 149.7 152.4 155.8 159.4 162.0Basic Income Tax Rate (% points) 23.0 23.0 23.0 23.0 23.0Real Income Tax Allows (Index, 1995=100) 100.0 100.0 100.0 100.0 100.0VAT Rate (% points) 17.5 17.5 17.5 17.5 17.5Employers NICs Rate (% points) 10.0 10.0 10.0 10.0 10.0Interest Rates (% points) 6.2 6.0 6.0 5.4 4.1Real Unemp. Benefits (Index 1995=100) 100.0 100.0 100.0 100.0 100.0There is no cha nge made in the of import policy instruments between the base forecast and the revised ones.This is the effect of the changes to the assumptions which has been made. 1999 2000 2001 2002 2003GDP ( process, % pa) -1.1 -2.0 -1.1 -0.0...High growth rates and high inflation rates go together. All these be the result of the rise in Oil price which is almost three times in the first two years of reckoning and more than in two ways in the next three years. The effect of these interlinked parameters has an impact on the other economic performances.Analysis The GDP growth shows a negative figure referable to the steep increase in the world oil price and in the substantial decrease in the rate of growth of the World trade (0.8%) during 1999. The figures apothegm themselves stabilizing during the subsequent period in 2000 with a growth rate of 3% which made the GDP growth rate 0. With a lowered growth rate, during the 1999 and 2000 this can be seen as a period of recession and the rest of the period from 2000 to 2003, there is a slow regaining resulting in lowering of the unemployment by the end of 2003. Inflationary tendency in the market comes down over this regaining period beyond 2000 while the earnings go up as indicated by the earnings inflation figure which shows an increase towards the end of the period. Current account holding has come down while at the same time, the alter of the DM indicates an advantage trade situation for sterling towards export of commodities and services rather than import of these services.i) A negative GDP growth rate was detect in the earlier cases.