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MACRO-ECONOMIC ENVIRONMENT REPORT: Impact of Macro-Economic Policy on the UK Economy CONTENTS PAGE Introduction 2 Main Instruments of Macro-Economic Policy: Monetary Policy 3 Fiscal Policy 4 Supply Side Policy 5 Effectiveness of the Policies: Monetary Policy 6 Fiscal Policy 7 Supply Side Policies 8 Effects of the Policies: Monetary Policy 9 Fiscal Policy 10 Supply Side Policies 11 Conclusion 12 Bibliography 13 Appendices 14 - 16 INTRODUCTION This report aims to illustrate the main instruments of macro-economic policies such as Monetary policy, Fiscal policy and Supply side policies showing their relation to Keynesian and Monetarist approaches. The report will also discuss the effectiveness of these policies in helping to achieve government objectives. By using case studies and examples this report will be able to show the possible effects that the policies have on economic agents such as consumers, employees etc. MAIN INSTRUMENTS OF ECONOMIC POLICY Monetary Policy Monetary Policy is when the government use interest rates and the amount of money in the economy to control the economy. Monetary policy can be used to expand the economy during a...

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