Answer to Question #147908 in Macroeconomics for Vuxaka Judy Maluleke

Question

Description of te type of fiscal policy required to recover from the negative effects of this covid-19 pandemic

Answer 1

Fiscal policy deals with government revenue collection and expenditure to influence a country's economy by means of taxes and spending measures.

-Protecting household income and employment is required where the government may extend wage and income to the self-employed and workers in the informal sector.

-Maintaining business cash flow should be considered where measures such as extending deadlines for tax filing, defferal of payments and some tax exemption. Tax policy should focus on limiting hardships while maintaining the ability for a quick rebound.

-A country may implement measures to help businesses retain their workers through short time work schemes or wage subsidies to provide income support while limiting job losses.