Question

What can governments do to try to promote economic growth?

Answer 1

Answer:

Government try to promote economic growth by the following ways :

1. The two policies the government can employ to influence economic growth and inflation are MONETARY and FISCAL policy
2. To increase spending in the economy and encourage economic growth, the government may lower interest rates and increase the supply of money however this can cause an increase in inflation.....

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Answer 2

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A government can try to influence the rate of economic growth through demand-side and supply-side policies, Expansionary fiscal policy – cutting taxes to increase disposable income and encourage spending. However, lower taxes will increase the budget deficit and will lead to higher borrowing.