People use the extra income (due to decline in taxes) on consuming extra goods and services. For example: When one buys more bread from the banker, the baker busy more milk from the milkman, who buys something else, thereby generating an incrase in demand on various levels
Fiscal Stimulus Package results in an in demand: An instant sour of ENERGY
- Fiscal Stimulus is a potent tool to fight recession, but its crucial to get the following right
o Timing of the stimulus package
o Size of the stimulus package
o This is tricky business since it is almost impossible to figure out where the reversionary period began and where it will end- Wrong timing could spoil things further by increasing fiscal deficit as well as inflation
Timing of the Stimulus Package is crucial; otherwise this it can fuel further problems
Courtesy: DSP Black Rock Investment Managers, DSP Black Rock Investment Managers
Fiscal Stimulus Package results in an in demand: An instant sour of ENERGY
- Fiscal Stimulus is a potent tool to fight recession, but its crucial to get the following right
o Timing of the stimulus package
o Size of the stimulus package
o This is tricky business since it is almost impossible to figure out where the reversionary period began and where it will end- Wrong timing could spoil things further by increasing fiscal deficit as well as inflation
Timing of the Stimulus Package is crucial; otherwise this it can fuel further problems
Courtesy: DSP Black Rock Investment Managers, DSP Black Rock Investment Managers
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