ECONOMIC STIMULUS

Written Assignment 5

BUS 1104-01

Macroeconomics
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The text describes several fiscal policy options to stabilize the economy: Changes in Government

Purchases, Business Taxes, Income Taxes, and Transfer Payments. Based on what you’ve

learned so far in the course, determine if the country you are living in currently needs

economic stimulus or contraction. Describe how each policy option could specifically be

used to change the national economy. Example: Country Z needs economic stimulus. The

government could lower the business tax on buying new equipment. This would stimulate

the economy because firms would have more money to invest which, in turn, increases

demand in the equipment supply sector.

Economic Stimulus is an action by the government to stimulate the economic activity of private

sectors by engaging them in monetary expansion or what we know as the Fiscal Policy.

Fiscal policy thus refers to the use of government spending and tax policies to influence

economic conditions such as aggregate demand for goods and services, employment

rates, inflation, and of course, economic growth. In accordance to this, Government

spending, Business Taxes, Income Taxes, and Transfer payments are the tools that are

used to boost aggregate demand when it’s weak. Yet on the other hand, when the

economy exceeds its capacity, Fiscal policy will do the opposite and may slow down the

economic growth to alleviate inflation. “Economic stimulus is commonly employed

during times of recession. Policy tools often used to implement economic stimulus

include lowering interest rates, increasing government spending, and quantitative easing,

to name a few.” (Munichiello, 2021)

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Currently, I reside in one of the world’s most stabilized economy, Qatar. If you look at how

Qatar has battled the recession, the pandemic and the gulf blockade, you will be amazed

how one small country was able to undermine its critics and rise above the threat of of

economic growth decline. “Qatar within the last 60 years transformed itself from a poor

British protectorate noted mainly for pearling into an independent state with significant

oil and natural gas revenues.” (Moody, n.d.) If we will look at Qatar’s economic growth

from an article of the Economist Intelligence, the economic growth will be stable

although a few fluctuations might occur. It is shown that in 2022 there was an increase of

Private and Government spending from its Expenditure on GDP, but it is predicted to be

stabilized by 2023. However, even if that’s the case the Economy also increased on

Imports and Exports on its expenditures. But it was stable since there is growth in

Agriculture and more growth by 2023 and the industry and services has also increased.

Meaning Qatar has been actively using economic stimulus despite the challenges it faced

in the past 5-7 years.

It is highly anticipated that with the continuous reign of the current King, the boost of the

economy from 2022-2026 will be secured. Qatar has always been resilient and proactive

in managing both the coronavirus pandemic and regional challenges such as the gulf

unrest when they were blocked by prominent gulf countries. Although, the tension has

been eased after 4 years of blockade, Qatar was able to stabilize on its own. “Qatar’s

Economy is one of the region’s strongest economies and one of the world’s most

promising economies. Qatar maintained balanced growth rates despite global challenges,

with Qatar’s GDP having expanded by over 5% in the first six months of 2018 compared

to the same period last year.” (Gov’t Communications Office, n.d.) According to His

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Heigness Sheikh Tamim bin Hamad Al Thani, King of Qatar, on 2018, ““Qatar National

Vision 2030 goals to achieve economic diversification and reduce dependence on oil and

gas never mean […] neglecting the oil and gas sector, the basic source of our wealth.

Economic diversification aims at achieving growth without being affected by fluctuations

in the prices of these two sources, but it is necessary to constantly develop them, and

preserve the wealth that God has bestowed upon us, for us and for our future generations”

Thus in this context, Qatar has proved a promising investment environment within the most

important sectors for the national economy and they were also able to accompany it (and

is continuously accompanying it) with an administrative and legislative system that

motivates business such as: Legislative framework to develop and attract investment,

Advanced Business Environment, and Developed Infrastructure, to name a few.

References:

Muncihiello, K. October 20, 2021. Economic Stimulus. Investopedia Website. Retrieved from

https://www.investopedia.com/terms/e/economic-stimulus.asp

Economist Intelligence. n.d. Qatar. Economic Intelligence Website. Retrieved from

https://country.eiu.com/qatar

Moody’s Analytics. n.d. Qatar – Economic Indicators. Economy Website. Retrieved from

https://www.economy.com/qatar/indicators#ECONOMY

Government Communications Office. n.d. Economic Policy. Qatar Government

Communications Office Website. Retrieved from

https://www.gco.gov.qa/en/focus/economic-policy/

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