Complete 1 page APA formatted essay: By summarizing the main arguments of the topic: Changes in Savings, The Effects of Fiscal Policy (An increase in Government Purchase.An increase in savings transla

Complete 1 page APA formatted essay: By summarizing the main arguments of the topic: Changes in Savings, The Effects of Fiscal Policy (An increase in Government Purchase.

An increase in savings translates into low investment opportunities and an increase in productive wealth, whereas a decrease in savings suggest there is a heavy investment leading to high production capacity (Mankiw 72). However, national accounts tend to keep the balance between savings and investment in order to maintain economic stability.

Fiscal policy is a measure that governments undertake in ensuring economic stability within a nation. An increase in government spending has a significant role in the economy as it takes a vast range of forms such as wages, social security benefits, infrastructure, and government employees among others. An increase in government purchases implies that the state assets are transferred to the public for economic development purposes. An increase in government spending leads into the creation of jobs and wages through government services and development projects. As a result, increasing government purchases results into more wealth to the public and high national income or output (Mankiw 73). The state employs fiscal policy, government purchases, in regulating national output. Therefore, an increase in government purchase results into a positive impact on the