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Define The Remedial Measures Of The Trade Cycle?

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Muhammad Abdullah786 Profile
Talking about the remedial measures in Fiscal policy, now days is considered to be a powerful ant cyclical weapon in the hands of the government. Fiscal policy involves the process of shaping the public finance with a view to reduce fluctuation in the business cycle and attainment of full employment without inflation.

If at nay time, the government finds that private investment is taking at a very fast speed and the country is likely to be threatened with inflation, it takes compensatory measures to contract. The government curtails its own public works programmers, levies heavy taxes on business profit to discourage private investment, reduces purchasing power by taking loans from the people, prepares surplus budgets to reduce public debts etc.

All these fiscal measures greatly help in curbing the inflationary tendency in the economy. If on the other hand, the country is faced with depression, the government launches its public works programmer so that the deficiency in the investment is made up. The government spends money on the construction of new canals, new buildings, new post offices and new irrigation works. Increased government.

expenditure during depression greatly helps increasing income, stimulating consumption expenditure and reducing un- employment. In order to encourage private investment, the government reduces taxes on business profits. The government also prepares deficits budgets are met by loans.

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