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Affect of Fiscal and Monetary Policy on Airlines Industry.

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How has the monetary and fiscal policy affected the employment rates of the airline industry

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This solution talks about the monetary and fiscal policy in the context of the airlines industry It also explores how these policies affect employment rate in the industry.

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THE EFFECT OF MONETARY AND FISCAL POLICY ON THE AIRLINE INDUSTRY
Monetary policy:
As there is a tight monetary policy there is a leash on spending and greater incentive to save, so the demand for airline services goes down. This adversely affects the employment rates of the industry.

Fiscal policy:
1. If the government reduces taxes or increases its spending, the income and the GDP goes up creating greater demand for the services of the airlines industry and improve employment rates.
2. If the government spends directly on the airlines industry by giving cash compensation payments, loan payments, loan guarantees and delay in tax payments, there will be a substantial improvement in the health of the airline industry and this will lead to an improvement in employment rates.
3. Through the fiscal policy ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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