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Essay / Macroeconomic Policy - 1997
INTRODUCTION: Macroeconomic stability means that all macroeconomic variables such as (unemployment, inflation, economic growth, GDP, investment, savings, etc.) are in such a state that they make the healthy and stable economy. :UnemploymentMacroeconomic stability policiesKeeping the IMF program on track.Role of government as an agent of development.Industrial restructuring.Inflation controlMacroeconomic stability policies:If the situation of the economy is bad and it is out of balance, then two policies are adopted to revive the economy. stable.Fiscal policy: This policy is adopted by the government in the event of an imbalance in the economy due to a macroeconomic variable. The tools of fiscal policy are taxes and public spending. To acquire the desired level of production, they increase/decrease aggregate demand or aggregate supply through this policy. In Pakistan, the level of tax evasion is very high among the population and there is no law against tax evasion or sanctions against people who have not paid taxes. . Out of a total population of 170 million people, we can even imagine that only 1.7 million pay taxes. This means that only 1% of the total population pays taxes. Due to this tax collection, Pakistan remains a third world country that relies heavily on foreign aid. This results in too much corruption and illiteracy in Pakistan. Tax measures to avoid this problem should focus on strict documentation and broadening the tax base of direct taxes. When we talk about public expenditure, it can be reduced by restructuring public sector enterprises by rationalizing subsidies and targeting subsidies to the poor only through Benazir income. The support program results in a better i...... middle of paper ......l will be improved, then the interest rate will slowly decrease. When the interest rate decreases, businessmen will use this opportunity and expand their business so that the industry is prosperous and makes the best use of resources. Foreign debts are managed by the following methods: Official bilateral debts must be retroactive. concessional loans must be replaced. Prepayment of expensive loans. The debt ratio fell from 100 to 60% of GDP. Short-term debts will be liquidated. Our trade policy is one of the “least restrictive trade policies in South Asia,” according to the World Bank. This policy encourages exporters to find a place in the international market. Our exchange rate policy will follow as they maintain stability and at the same time huge foreign investment will help it to make the economy stable..