Answer to Question #170994 in Macroeconomics for Shreyal Makwan

Question

The Kingdom of Wrigley is an archipelago in the South Pacific. The economy is based on fishing and agriculture, and currently imports more than it exports. The economy is doing good right now, but not great, and the banking system is stable yet fragile. The central bank is not independent and follows the instructions of The King. The King, wanting new economic ideas, and having been told you took a macroeconomics class before moving to the Kingdom, invites you to the palace to meet with his son, the Crown Prince, and also the Finance Minister. The Crown Prince has a number of questions for you

1.    How specifically can we use fiscal policy to improve our economy? What should our goals? Should we have any concerns?

Answer 1

Fiscal policy plays very important role in development of any country. In this case I will suggest prince to maximize government investment to other sectors, since economy is totally dependent on fishing that why they need to diverse their resources.