Answer to Question #292391 in Macroeconomics for Ali

Question

How the economic problems can be solved during the covid-19? Which school of thought help in the best way to solve these problems.

Answer 1

How the economic problems can be solved during the covid-19?

1.     Tax Cuts and Tax Rebates

Consumers will benefit from tax cuts and refunds because they will have more money in their pockets. In an ideal world, these customers spend a part of their money at numerous firms, boosting sales, cash flow, and profits. Companies with more cash have the capacity to get finance, upgrade technology, grow, and expand. All of these behaviors boost productivity, which promotes economic growth. Proponents claim that tax cuts and incentives allow customers to stimulate the economy by injecting more money into it.

2.     Using Deregulation to Stimulate the Economy

The loosening of rules and restrictions placed on an industry or business is known as deregulation. When the federal government deregulated several industries, most notably financial institutions, during the Reagan administration in the 1980s, it became a main focus of economics in the United States. Many analysts credit Reagan's deregulation for the United States' strong economic growth throughout the 1980s and 1990s. Deregulation proponents say that restrictive restrictions limit firms' ability to develop and operate to their full potential.

3.     Using Infrastructure investment to Promote Economic Growth.

When a local, state or federal government invests money to create or maintain the physical structures and facilities required for business and society as a whole to prosper, this is known as infrastructure expenditure. Roads, bridges, ports, and sewer systems are examples of infrastructure. Infrastructure expenditure, according to economists who embrace it as an economic accelerator, enhances productivity by allowing businesses to run as effectively as feasible. Trucks, for example, spend less time stuck in traffic when roads and bridges are plentiful and in good repair, and they don't have to take tortuous routes to cross waterways.

Which school of thought helps in the best way to solve these problems?

The Macroeconomics of Keynes is the school of thought I applied.

Demand drives supply, according to Keynesian economics, and strong economies spend or invest more than they save. When faced with a recession, Keynes believed that governments should increase expenditure and decrease taxes in order to generate employment and raise consumer purchasing power.