How do government policies and/or regulations factor into changes in economic ac

Question

How do government policies and/or regulations factor into changes in economic activity on both a domestic and global scale? Give a specific example of a policy or regulation that has helped economic activity. Give a specific example of a policy or regulation that has hindered economic activity. If you were an economist who was tasked with evaluating this policy or regulation, what are some ideas you would suggest for changing it in a way that would achieve the same goal but not hinder economic activity? Finally, state whether or not you enjoy these types of evaluations and if you would consider these types of responsibilities in a future career.

Explanation / Answer

Government policies are implemented with certain objectives. One of the primary objective is to stabilize the economy and give controlled and progressive development of economic activities. It is done while measuring the development taking place at global as well as domestic level. For example, recession taking place in overseas nations also cause government in other unaffected countries to take necessary conditions. At domestic level, the rise in prices also puts regulatory bodies on alert and necessary action is taken.
As a specific example, the Federal Reserve reduced fed rate up to 0% with many stimulus packages to promote economic activities in the aftermath of the 2008 financial crises. As a result, the economy is coming back on track and positive development in employment opportunities, GDP growth and price stability can be observed.
Sometimes, government implements economic policy that can hinder economic activities in the long term. Though, no any government wants to do it intentionally. Prolonged implementation of contractionary monetary policy by government in a country that is service based, can hinder economic activities. Also, government tries to reduce deficit. It takes austerity measures and reduces government spending. Thus, economic activities are reduced.
Some of the ideas to prevent hindrance to economic activities are as follows:
1.   Balance in focus given to all the industries in an economy
2.   Step by step implementation of economic policy so that participants absorb the same
3.   Timely review of the policy and its overall performance with economy
4.   Balancing the conflicting factors of economy, such as GDP growth and inflation, GDP and prices, cost push and demand pull inflation
5.   Focus on import and export that can influence economic activities

It is always a challenging job to evaluate an existing policy and suggest alternative means to resolve the issue. It gives me an added motivation to work. Thus, it would like to take such assignments in the future also.

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