Using Demand Management Policies to Promote Economic Growth in the UK Essay

Using Demand Management Policies to Promote Economic Growth in the UK - Essay Example Economic growth can be defined as a measure of a rise in the Growth Domestic Product (GDP). It is for this reason that we determine whether a country is undergoing inflation or growth and the cost of living of a particular country. To better understand the definition, the term GDP should be made clear. The latter gives a sum total of the production of a given country for the year in question. The total sum comes from adding the government, business and citizen’s expenditure and deducting it from all exports of the country (McCombie and Anthony 43). This will give a general idea of how the market is performing against other international trading markets. The current economic level as explained earlier can be attributed to a number of factors. One of them is that the government has been against the policy of owning property by the public and has also declined the expansion of welfare programs for the public. Nevertheless, the country has an enviable service industry with proper and modern facilities in place. These facilities can be traced to the banking sector, insurance and other business entities that have sky-rocketed the economic growth. Ironically, industries are not in the limelight anymore. As for the forecast economic growth, the International Monetary Fund (IMF) has much to say about the future of the United Kingdom. They report that the world is undergoing a recovery phase, but certain factors will inhibit this progression. High risks with no guaranteed returns continue to challenge investors, which can diminish growth; added that the financial aspect and business opportunities are low. Mr. Daniel Tarling-Hunter, an economist explains why the economy may be falling apart (Thompsons 22). The three reasons that he puts forth are linked to an increase in the rates of unemployment, adding that there is increasing inflation in the region leading to people’s distrust in the government. He adds that this may change in the middle months of 2012 d ue to hosting of the Olympic Games and an overall decrease in inflation. The economic policies of the UK gear towards a decrease in the manufacturing and production industries. This has caused a stir among the renowned economists of the country. The government has been instrumental in providing policies aimed at enhancing even and proper financial growth all over the country. For instance, it has tried to promote business and its prospects in a view to increase employment in the region. There have been four policies instigated to help economic growth. One of them is the fiscal policy targeting the finance sector which has been out of hand since the public is borrowing large sums of money to pay expensive mortgage thus enhancing debt. The monetary policy will aid in ensuring regulation of prices for greater stability in the trade market while the microeconomic policies will target at drawing the country into a better stand in the world economy by looking into issues of taxation syste m and business system. Increased government spending refers to the act of the government to influence the economic setup of a country by acquiring more goods and services than it had previously allocated in its national budget. There is an overall rise in the total demand of the country during such periods. It is part of the fiscal policy by the government to control spending in the country. It could have a positive or a slowed impact on the country’s economic prospect. When there is less spending by the government, the rate of GDP goes under since it