Answer the following questions of the case study below;

Discuss briefly the idea of each case study

1. CASE STUDY: Macroeconomics

Fiscal Policy

Fiscal Policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's money supply.

In the Philippines, the government responsible for the formulation, institutionalization, and administration of fiscal policies is the Department of Finance (DOF). The department that enacts fiscal activities is Bureau of Customs (BOC) who imposes tariffs and duties on all items imported into the Philippines while the Bureau of Internal Revenues is in charge of tax collection.

The tax system of the Philippines is considered to be outdated and that tax reforms are needed in order to ease taxpayers especially when the Philippines has the 2nd highest tax rates in the ASEAN region. Under the National Internal Revenue Code of 1997, individuals with taxable income of over P500,000 are taxed with a fixed amount of P125,000 plus the 32 percent of the excess over P500,000. Senator Sonny Angara explained in the explanatory note regarding the income tax reform bill that it emphasized that the Constitution mandates that the "rule of taxation shall be uniform and equitable," and that the "Congress shall evolve a progressive system of taxation" wherein the tax rates imposed must be based on the person's ability to pay.

Senator Angara added "P500,000 in 1997 does not have the same value today due to inflation. P1 in 1997 when adjusted for inflation is now worth only 44 centavos. Middle-income earners, who were mostly taxed at 25 percent in 1997, are now pushed into the top tax bracket at 32 percent together with the billionaires of our country because of our outdated tax system. Is this equitable and progressive? Clearly, it is not," the senator said.

What are your thoughts?

2.

CASE STUDY: Macroeconomics Stock Market Asian stock markets, led by Japan, are in negative territory on Tuesday following the lackluster cues overnight from Wall Street amid rising expectations that the U.S. Federal Reserve will lift interest rates as early as June. In addition, lower commodity prices weighed on resources stocks. Despite of China's recovering Purchasing Managers Index (PMI) it is still not able to help other stock markets in Asia. The Nikkei 225 shed 0.59 percent, likely weighed by the yen taking a leg higher. The dollar fetched 110.74 yen at 9:36 a.m. SIN/HK, with the dollar-yen currency pair recovering from lows around 110.42 earlier in the session, but still down from levels over 111 on Tuesday. For China, their PMI was at 50.1 which was a tick higher from the median of 50. Analyst stated that an index of 50.1 is acceptable because it indicated a degree of economic stabilization. What are your thoughts? Sources: http://www.nasdaq.com/article/asian-markets-in-negative-territory-20160523 01058#ixzz4A171YcLL http://www.cnbc.com/2016/05/31/asia-stock-markets-focus-on-china-official-caxin- pmi. htmlOn the other hand, Contractionary Monetary Policy is the setting that intends to decrease the level of liquidity/money supply in the economy and which could also result in a relatively lower inflation path for the economy. Examples of this are increases in policy interest rates and reserve requirements. Contractionary monetary policy tends to limit economic activity as less funds are made available for lending by banks. This, in turn, lowers aggregate demand which could eventually temper inflation pressures in the domestic economy. In the Philippines the Bangko Sentral ng Pilipinas (BSP) is in charge of implementing monetary policy actions. As of 2016, The Monetary Board decided to maintain the BSP's key policy rates at 4.00 percent for the overnight borrowing or reverse repurchase (RRP) facility and 6.00 percent for the overnight lending or repurchase (RP) facility. The interest rates on term RRPS, RPs and special deposit accounts (SDA) were also kept steady. The reserve requirement ratios were likewise left unchanged. What are your thoughts? Source: http://www.bsp.gov.ph/monetary/monetary.asp http://www.bsp.gov.ph/monetary/glossary.aspCASE STUDY: Macroeconomics Monetary Policy (Interest Rates) Monetary policy is the measure or action taken by the central bank to influence the general price level and the level of liquidity in the economy. Monetary policy actions of the BSP are aimed at influencing the timing, cost and availability of money and credit, as well as other financial factors, for the main objective of stabilizing the price level. Expansion monetary policy is the setting that intends to increase the level of liquidity/money supply in the economy and which could also result in a relatively higher inflation path for the economy. Examples are the lowering of policy interest rates and the reduction in reserve requirements. Expansionary monetary policy tends to encourage economic activity as more funds are made available for lending by banks. This, in turn, increases aggregate demand which could eventually fuel inflation pressures in the domestic economy