Issue in Accounting Theory

Question: What is the Issue in Accounting Theory ? Answer : Presentation This paper means to give a basic investigation of the article Half a guard of Positive Accounting Research by the writer Dunmore. The exposition investigations the qualities and shortcoming of the article that expects to look at the commitment of positive bookkeeping hypothesis in more extensive examination program. The article is tied in with inspecting the importance of positive bookkeeping approach in the field of bookkeeping. It will in general feature the insufficiencies in the positive bookkeeping approach and along these lines proposes the utilization of better hypothetical ideas in bookkeeping research. The principle contention introduced in the exploration paper is whether positive bookkeeping hypothesis is powerful in accomplishing logical targets of bookkeeping research (Dunmore, 2009). The basic examination of the article in the exposition is directed by summing up its primary concerns, distinguishing research questions, talking about its hypothetical structure and examin ing its hugeness and impediments to be utilized in future investigates. Rundown of Article The examination article intends to give a top to bottom comprehension of the positive methodology utilized in more extensive bookkeeping research program. The fundamental thoughts introduced by the writer in the examination article are focused about portraying the significance and shortcomings of the positive bookkeeping hypothesis. The hypothesis was created by Watts and Zimmerman in the year 1970 and it depended on regular science wonders. The hypothesis depended on common science marvels and subsequently was viewed as to a great extent powerful in accomplishing the logical targets of bookkeeping research (Dunmore, 2009). Bookkeeping explores basically includes functional testing of bookkeeping forecasts and in this way requires execution of hypothetical structure dependent on logical wonders. As such positive bookkeeping hypothesis was accepted to be to a great extent valuable to be utilized in bookkeeping explores in contrast with regularizing bookkeeping hypothesis (Ghnabari et al., 2016). Standardizing bookkeeping hypothesis depended for the most part on hypothetical rule of bookkeeping and has no down to earth direction. Then again, positive bookkeeping hypothesis is created based on logical rule and therefore was viewed as valuable in accomplishing reasonable results of bookkeeping research (Chatfield and Vangermeersch, 2014). The article, in this unique situation, has analyzed the commitment of positive bookkeeping hypothesis in the bookkeeping field. The article has delineated the shortcomings of positive bookkeeping hypothesis and consequently has proposed the appropriation of better hypothetical methodologies in bookkeeping research (Wickramasinghe and Alawattage, 2012). The writing survey area of the article has introduced the perspectives and assessments of various writers on the utilization of positive bookkeeping hypothesis in bookkeeping research programs. The examination article has underscored about the confinements of positive bookkeeping hypothesis in a chieving the useful results of bookkeeping research. Along these lines, the article gives a strong base to future explores about investigating and analyzing the value of positive methodology in bookkeeping investigates (Dunmore, 2009). Examination Question The exploration inquiries of the article have been distinguished through basic assessment of the writing audit segment. The writing audit of the article is focused about investigating the significance and shortcomings of positive bookkeeping hypothesis in the field of bookkeeping. The article means to give a response to the accompanying inquiry as examined from its writing survey Does positive bookkeeping hypothesis can be applied in accomplishing logical goals of bookkeeping research.? (Dunmore, 2009). Furthermore, the examination concentrate additionally looks to address the accompanying sub-research questions: What is the significance and shortcoming of positive bookkeeping hypothesis in the field of bookkeeping research? What are the principle points of interest of positive bookkeeping research in contrast with other hypothetical model utilized in bookkeeping investigates? Does there exist a requirement for the appropriation of better hypothetical model in bookkeeping research when contrasted with positive bookkeeping hypothesis? Hypothetical Framework The hypothetical structure of the examination article began from the writing audit segment. The perspectives and assessments of various writers about the exploration subject are introduced inside the writing survey that builds up the hypothetical system of the examination article. The hypothetical contentions of different creators underscores on the shortcoming of positive bookkeeping they that makes it generally unfit to achieve effectively the useful results of bookkeeping research. Watts and Zimmerman created positive bookkeeping hypothesis and guaranteed it to be generally valuable in testing the bookkeeping forecasts created in bookkeeping investigates. This was because of the improvement of the hypothesis based on logical marvels as correlation with other hypothetical models use in bookkeeping that depends on hypothetical standards (Rhonheimer, 2000). Watts and Zimmerman have asserted that the hypothesis of positive bookkeeping depends on clarifying the reason and impacts conne ctions that is basic for doing bookkeeping investigates. In any case, various writers in the exploration article have recommended that positive bookkeeping hypothesis is principally founded on esteem judgment. Consequently, the hypothesis is by all accounts unseemly for accomplishing the down to earth results of the bookkeeping research (Burns and Needles, 2014). The various writers in the writing audit area of the exploration article have recommended that albeit positive bookkeeping hypothesis have upgraded the comprehension of different bookkeeping wonders however it isn't valuable in testing of bookkeeping forecasts (Dunmore, 2009). The principle commitment in featuring the insufficiency of psoitiev bookkeeping hypothesis originates from Poppers adulteration basis. The creator has recommended that the advancement of logical bookkeeping hypothesis depends on arrangement of steps that frames the reason for its acknowledgment or dismissal. The hypotheses created are acknowledged a logical speculations in the event that they meet the necessities as expressed by Popper. The initial phase in the distortion model of Popper is watching and looking at the starter thoughts proposed from the hypothesis. This is trailed by testing the perceptions for investigating their logical premise. The quantitative testing of forecasts is basic for accomplishing solid exact confirmations. The forecasts tried should be quantitative in nature as they are increasingly defenseless to distortion. This is trailed by testing the expectations of the new hypothesis against the result accomplished from recently settled speculations. Accordingly, the new hypothesis created is acknowledged as logical in the event that it meets the entirety of the above expressed criterias. The hypothesis of positive bookkeeping need likewise to be broke down and inspected based on all the above expressed prerequisites to be acknowledged a logical. The different creators have addressed on the acknowledgment of positive bookkeeping hypothesis on logical premise as it depends principally on esteem judgment (Deegan, 2014). The hypothesis is basically supposed to be founded on expository methodologies and in this manner its usage in accomplishing down to earth results of bookkeeping research is put under discussion (Bazrafshan and Talebina, 2016). The writer through the current article has recommended that better and improved hypothetical models should be utilized in bookkeeping research programs. The field of bookkeeping has to a great extent been developed since recent years and along these lines the hypothesis of positive bookkeeping by and by isn't seen as appropriate in accomplishing its results. The hypothesis ought to be utilized in blend of other hypothetical methodology for viably meeting the commonsense based results of bookkeeping research (Dunmore, 2009). The bookkeeping investigates are basically conveyed for proposing the determination of a precise bookkeeping technique so as to determine an unpredictable bookkeeping issue. The administration of enormous and complex business associations generally directs bookkeeping research for choice of a specific bookkeeping technique to determine a bookkeeping issue. Along these lines, precise determination of bookkeeping technique is fundamental for upgrading the presentation of business associations. The bookkeeping investigates for the most part include reasonable testing of bookkeeping predications for choice of a proper bookkeeping arrangement (Kabir, 2007). The hypothesis of positive bookkeeping accordingly is by all accounts unseemly in completing commonsense testing of bookkeeping expectations. Thusly, it is exceptionally basic for specialists to utilize better and improved hypothetical models in field of bookkeeping that can successfully do pragmatic testing of bookkeeping expectations . Hence, the general hypothetical system of the exploration article has recognized and dissected the insufficiencies of positive bookkeeping hypothesis to be utilized in more extensive examination program (Dunmore, 2009). Essentialness and Limitations of the Article The examination led in the current article hold high essentialness in the area of bookkeeping. It will give important understanding to the future specialists about the impact of positive bookkeeping hypothesis in bookkeeping investigates. The future explores can do a top to bottom examination about the primary lacks in positive bookkeeping hypothesis. It will likewise be useful for future scientists to comprehend the idea of hypothetical models that ought to be utilized in bookkeeping investigates. The hypothesis of positive bookkeeping has been utilized in bookkeeping investigates since a significant stretch of time. The current exploration study, in such manner, has embraced a significant investigation to recognize the lacks of this hypothesis. This will improve the extent of bookkeeping and furthermore upgrade the nature of bookkeeping research in future setting. The improvement of better hypothetical ways to deal with be utilized in bookkeeping explores will help in improving the business execution of associations. The settling of basic a

Australian Social and cultural change essays

Australian Social and social change expositions Since 1901 Australia has seen a great deal of social and social changes, after each of the a ton can occur in one hundred years. The further developed innovation, the working conditions, and family way of life are a portion of the various highlights, which have impacted these changes. The most evident change is the further developed innovation. This has impede and helped in numerous territories, for example, transport, correspondence, and wellbeing. One hundred years back, accepting data was moderate, getting here and there was tedious and living day by day life was plain difficult work. With no air travel, delivers the main method of going abroad, sixty vehicles existing and the primary method of transport been by horse drawn carriages, you could envision the moderate pace of the everything in 1901. Presently in 2001 there are around 11,737,900 vehicles, air travel is at its best, and going by ponies is fundamentally non exsistinant. This has helped from numerous points of view, for example, with over oceans ties, which was used to be hard a direct result of Australians geological position. Due to air travel we get more visitors into Australia and thus we get a higher benefit each year. Another significant manner by which innovation has helped is in correspondence. One hundred years back the best approach to speak with loved ones was to present a letter or on send a message. This could take weeks or even a very long time to get due to the vehicle frameworks being so moderate. They relied upon horse drawn mentors and vehicles, which were in their initial improvement stages. Additionally with the nonappearance of air transport they relied upon ships. Presently our data can be conveyed practically prompt with the utilization of the phone, fax machines, cell phones, utilization of media, Internet administrations and the utilization of air travel. PCs have help correspondence a lot. With the utilization of PCs and the Internet we are currently ready to write to individuals on the opposite side of the world and that individual could get at the press of a catch. The n ... <!

The Working Conditions of Psychologists

The Working Conditions of Psychologists Student Resources Careers Print The Working Conditions of Psychologists By Kendra Cherry facebook twitter Kendra Cherry, MS, is an author, educational consultant, and speaker focused on helping students learn about psychology. Learn about our editorial policy Kendra Cherry Updated on February 14, 2020 Markus Haefke / Getty Images More in Student Resources Careers APA Style and Writing Study Guides and Tips If youve ever considered becoming a psychologist, then youve probably wondered a little bit about what the working conditions might be like. As with many other professions, a psychologists specialty area and workplace are the major determinants of the working conditions. For example, a forensic psychologist might spend his or her day working in courthouses, police stations or criminal detention centers. A clinical psychologist, on the other hand, might spend his or her day working in a hospital or other mental health setting. Employment Settings Psychologists, especially clinical and counseling psychologists, often work in private practice. This means that they have their own offices and are able to establish their own work schedule. It is important to note that many psychologists who run their own businesses frequently work evening and weekend hours in order to accommodate the schedules of their clients. The U.S. Bureau of Labor reports that nearly one-third of all psychologists were self-employed.?? Some psychologists work shift schedules, including those employed in hospitals, nursing homes, retirement centers, and other healthcare facilities. This often includes working night shifts and weekends. Psychologists employed in academic settings, government or business settings generally have a more predictable schedule that follows normal daytime hours. However, those teaching at the university level may also have to teach courses during evenings or weekends. Psychologists employed by colleges and universities often spend time teaching classes and conducting research, but they may also be required to perform administrative duties. It is also not uncommon for psychologists to work in more than one setting. A clinical psychologist might see clients at a private practice or mental health clinic and also teach courses at a local university. An industrial-organizational psychologist may spend time observing behavior in the workplace and conducting research in an experimental lab. Collaborations With Other Professionals A psychologists working conditions can also depend on whether or not the individuals work in a research-oriented career or a more applied profession. Those who conduct research may spend time interacting with study participants, but a great deal of time will also be spent designing studies, analyzing results and preparing research reports. Those who work in more applied professions will likely spend more one-on-one time with clients. Working conditions can be stressful at times, particularly when dealing with clients who are emotional, angry or noncommunicative. Finding ways to deal with such stress and combat job burnout can be important for many professionals.?? According to the Occupational Outlook Handbook published by the U.S. Department of Labor, psychologists today often work in collaboration with other professionals.?? They may consult with other psychologists, physicians, psychiatrists, physical therapists, and other professions as part of a mental health treatment team. The handbook also states that psychologists frequently deal with work pressures including schedules, deadlines, and overtime. Difficult clients, emotionally charged situations and other stressful situations are also common.?

Customer Service Issues Within Cricket - 2343 Words

Lead effective workplace relationships Assessment Task 2: Project Part A Agenda To: info@Cricketequip.com.au; sale@Cricketequip.com.au; customerservice@Cricketequip.com.au; From: MarketingDept@Cricketequip.com.au; Subject: Recent customer service issues within Cricket Equip Date: 21/10/15 Meeting topics to be discussed: 1. Meeting introduction and welcome. 9.00 am – 9.10 am 2. Current customer service issues within Cricket Equip. 9.10 am – 9.45 am 3. Cricket Equip’s customer service standards and requirements. 9.45 am – 10.00 am 4. Recommendations for customer service improvement. 10.00 am – 10.30 am 5. Staff feedback on how customer service can be improved. 10.30 am – 11.00 am 6. Staff training needs of customer service. 11.00 am –†¦show more content†¦You should explore at least one external opportunity and construct an email that you might send to an external training provider seeking information about the training. Your email must be written clearly and respectfully. Include a copy of the email as an appendix to the one page report as indicated below. Range of opportunities for staff training Explanation Career planning The activities we need to take in order to achieve our career goal. This includes: knowing our interests and abilities, and exploring learning options and actions plan to achieve our career goals. Accredited and non-accredited training We can be provided either recognized qualifications or specific needs by attending these training. Buddy systems This is where individuals are paired and one would take responsibility for the welfare and safety. Buddy systems would help to promote friendship and support between peers. Coaching This is where people can be trained or supported to achieve a specific goal. Counselling People can get advice, opinion and instruction directly. Mentoring Learners/ Employees will be trained and supported by a senior or experience individuals, who may be counselors or advisors. On or off-the-job training and development This type of training is provided away from workplace in order to minimize distractions and encourage trainees to pay full attention. It includes lectures, case studies and simulation†¦ An email to theShow MoreRelatedRecent Customer Service Issues Within Cricket1179 Words   |  5 PagesSubject: Recent customer service issues within Cricket Equip Date: 18/05/2016 Meeting topics to be discussed: 1. Meeting introduction and welcome. 8Am – 8:10am 2. Current customer service issues within Cricket Equip. 8:10am – 8:50am 3. Cricket Equip’s customer service standards and requirements. 8:50Am – 9:30am 4. Recommendations for customer service improvement. 9:30am – 9:55am 5. Staff feedback on how customer service can be improved. 10Am – 10:20am 6. 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An Introduction to Geography

“Saudi Arabia still projecting the real picture of Islam Free Essays

The geo-political consequences after the 9-11 mishap entirely twisted the image of the Muslim countries all over the world. Many countries like Pakistan, Afghanistan, Egypt, Syria and Iran had to face the menace of the â€Å"War Against Terrorism† and even had to combat with their domestic security issues which set tough challenges for them to struggle to maintain their peaceful image on an international perspective. Saudi Arabia is one Islamic country which somehow managed to sustain its dignified and peaceful image on the map of the contemporary international political scenario and this was possible because of their positive and influential foreign policies, their economic stability and their potent financial role across the globe. We will write a custom essay sample on â€Å"Saudi Arabia still projecting the real picture of Islam or any similar topic only for you Order Now Another factor that added to their credit was their domestic prevalence and sustenance of law and order that enabled the pace of their progress to remain uniform and also provided external favors to flourish within the country. Most of the Muslim countries have not been able to earn significance in the pace of economic progress and development of the world throughout the last century; despite being the oil producing and exporting countries like Syria could not be listed amongst the developed ones. But Saudi Arabia since its establishment of modern Kingdom back in 1932 has not only been uniform in its form of Government but also maintained a uniform pace of progress and development in all the walks of life. Its chief source of income has no doubt been the export of oil and products of petroleum as it has been one of the leading oil producing countries of the world but the Government of Saudi Arabia has always invested at a mass level to improve and upgrade the overall socio-economic representation of the country. Saudi Arabia is the center of the Islam as the entire Muslim ummah (community) ahead towards this region during the holy month of Zil Haj to perform the annual pilgrimage (HAJ) to the holy city of Kaaba, in Makkah and also to pay homage to the Prophet’s grave in Madinah. This annual tourism also brings in a lot of foreign exchange and revenue to the Saudi treasure. Apart from the earnings the organizing of this great event every year also proves the persistent efficiency of the Saudi administration and also their expertise in catering people from different regions of the world with heterogeneous backgrounds in the most homogenous environment. They have certainly proved to be very ardent custodians of the Islamic heritage of the Two Holy Places. The Kingdom of Saudi Arabia has always kept the superb maintenance of these two Holy places in the top most priority. The Ministry of Pilgrimage, in union with other government agencies, manages the annual logistical challenge for the organization of Hajj and endorses such projects in the Kingdom and abroad that promote Islam’s role in the community. The annual conducting of Hajj reflects the dedication of the leadership and citizens of the Kingdom of Saudi Arabia to the service of Islam and this also totally negates and defies the general impression of the Muslim community as terrorists or fanatics. Apart from the religious service Saudi Arabia has also been a great donor for many Muslim countries for several humanitarian causes and also as war aid. Since 2002, Saudi Arabia has provided more than $480 million in budgetary support to the Palestinian Authority and supported Palestinian refugees through contributions to the UN Relief and Works Agency (UNRWA). More than $250 million was also provided to Arab League funds for the Palestinians, and pledged $500 million in assistance over the next three years at the Donors Conference in Dec 2007; pledged $230 million to development in Afghanistan; pledged $1 billion in export guarantees and soft loans to Iraq; pledged $133 million in direct grant aid, $187 million in concessional loans, and $153 million in export credits for Pakistan earthquake relief; pledged a total of $1. 9 billion to Lebanon in assistance and deposits to the Central Bank of Lebanon in 2006 and pledged an additional $1. 1 billion in early 2007. Many things may have been said in the most crucial diction about Saudi Arabia by the west especially after the 911 attacks. Some writers like Dore Gold in his book â€Å"Hatred’s Kingdom: How Saudi Arabia Supports the New Global Terrorism† have stated the Saudi government to be directly involved in the plotting of the attacks and even nurturing the Al-Qaeda’s ma ster minds like Osama Bin Laden. Such claims could easily be made and concocted as all the odds were tilted towards the Muslim community at the heat of the moment of the 911. But the fact is that Saudi Arabia has always been an ally for the war for peace and has supported US during the Gulf War in 1990. Secondly Saudi Arabia and US have been partners in the petroleum exports and distribution since 1970s when ARAMCO was established. Saudi Arabia is also considered to be one of the fastest developing countries of the modern era. This is because of Saudi Arabia’s free market economy which has shown remarkable progressive shifts in the recent past. It has been observed that Saudi Arabia has managed to develop its agricultural society into an advanced economy that is globally connected through modern technology and infrastructure. This depicts the progressive minded approach of the Saudi government which has always focused on the development of the country by meeting the contemporary pace of development especially in the modern means and modes communication. This leap towards progress began during the time of King Faysal who invested at a large scale for the improvement of the infrastructure and the communication system. His motto was the modernization of Saudi Arabia. This era is even known to be the renaissance of the Saudi intellect of progress and development. And since then Saudi Arabia has made an effort to become the member of WTO in December 2005. Although there may be numerous reasons why countries like Saudi Arabia become a victim of criticism under the tag of stereotypical for its people, ideas, customs and even religious beliefs but the fact and the figures regarding Saudi Arabia’s peaceful role in the present scenario political turmoil proves that associating such rigid views with such a progressive and rapidly developing country like Saudi Arabia would itself be a biased and un-scrutinized bent of thought that requires maturity of insight to comprehend. How to cite â€Å"Saudi Arabia still projecting the real picture of Islam, Papers

Government Role in Managing Short run Instability in the Economy

Question: Write an report onGovernment should play active role in managing short run instability in the economy caused by unemployment and inflation problems. Answer: In the long run, we all are dead said John Maynard Keynes. The basic assumption behind the same was the fact that it is the short run stability in the economy achieved through fiscal tools (i.e. taxation and government spending) that matters rather than thinking about the long term effects of such measures. According to several economists including Keynes, in the long term every parameter/indicator (namely labour and capital) changes because of the changes in technology, the scientific temper and the desire to make the world a better place to live in. Further, the economy of any country is lead by its people or households, who are dynamic in nature with each one behaving in a different manner to the same problem in front of them. The economy is a product of all decisions undertaken by each household. Thus, it becomes really difficult to understand the exact impact of the measure. In the current context, it is short term stability (reducing unemployment and inflation) which the government looks to achieve through the use of fiscal policy. In a country like India, where the government has the power to control instability (long run or short run), the correct use of fiscal tool can go a long way in achieving short term stability. Thus, leading to the economic growth of the countrys in long run. Just as a proverb goes A rupee saved in a day can provide you saving of 365 rupees in a year. In the same manner, achieving short term stability can go a long way in achieving long run stability in the economy. In short run, households prefer to have economic stability with continuous employment and stable incomes. This allows them to undertake major investment decisions in the future by foregoing the current consumption. In one word, people understand and appreciate the opportunity cost of foregone consumption for a better living in the future. In short, if we maintain strong and stable macroeconomic fundamentals, it can go a long way to contribute towards economic growth and welfare. The logic for the above arguments is simple. Economic stability over a period of time increases the confidence of its people in its governments actions and policies. This in turn leads to increase in savings of the people due to stable income over a period of time. Once the savings increases, it gets invested by the households or by the banks for generating economic activity. With the generation of economic activity, there is increase in production of goods and increase in employment. This increase in employment provides people with wages, which are in turn spent on purchase of goods and services. Thus the economic cycle keeps moving, finally leading to economic growth and welfare. In this smooth running economic cycle, there creeps in the problem of economic instability. The problem of economic instability arises because of multiple factors affecting the demand and supply of goods in the economy. According to the classical economists, the instability in the economy arises due to the dynamic behaviour of each household towards its consumption and investment decisions. These individual decisions combined for an economy produce a collective demand and supply of goods and services, which is unstable in nature. For Example, person A and person B draw salary of 30,000 per month but person A chooses to save the amount for future consumption but person B chooses to spend the same for buying a motorcycle. Person A salary does not contribute to the economic cycle at present but person B salary helps the cycle to move. In short, every person acts according to their own needs and circumstances, which might not contribute to the economic cycle as mentioned above. This is t he sole reason for economic instability arising in the economy. The Classical Economists where the one who thought that economic instability is a regular phenomenon and should be left upon the natural forces to correct them. But we all are aware of the Great Depression of 1930s and the government seemed to be helpless. It was during this time that the economist realised that they had missed out on the basic fundamental of the economy. This was the time when the concept of macroeconomics came to light bringing along with it new theories and possibilities. In the later years, Keynes introduced us to the concept of Business Cycles. The Business cycle of boom, constant, recession and depression where thought of to be a natural phenomena, something that can be predicted. To everyones dismay the economic crisis seems to surpass all predictions. The US subprime lending crisis and the very recent Euro Crisis stand as testimony to the statements mentioned above. There is a general consensus among all economists including Keynes that a mild instability in the economy caused primarily due to inflation (not more than 5% on year-on-year basis) is good and depicts the healthy state of the economy. But Keynes on the other end advocated on the use of appropriate tools of macroeconomic policy to cure the instability in the economy. Every economy has a monetary and fiscal policy to control the macroeconomic instability in short run or long run. We have seen that the monetary policies where ineffective to lift the economy out of depression in 1930 and during the post World War II. Thus, Keynes along with several other economists was of the view that fiscal policy shall be used for correcting the economic instability. In India, the fiscal policy of the government mainly consists of taxation and public spending as tools for controlling any instability in the economy. The economic instability is mainly caused due to two factors: unemployment and inflation. The second term i.e. inflation or price instability is something the government seems more concerned because inflation leads to increase in prices of goods and services. Once there is rise in price, the real value of money decreases. The household in the economy turn bearish and stop buying the goods and services. This leads to reduction in production of goods which affects the economic growth of the country. Inflation can be reduced by controlling the growth of aggregate demand or giving a boost to the growth of aggregate supply. In other words, for bringing the economy from the state of instability to stability we need to control aggregate demand or aggregate supply component through proper fiscal policies. It can either choose to use the tool of contractionary fiscal policy or expansionary fiscal policy. Fiscal policies generally work through changes in the aggregate demand for goods and services as the effect is fast and effective. A fiscal expansion (increase in government spending through tax cut or increase public spending) leads to an increase in the aggregate demand for goods and services. An increased spending by the government leads to increase in disposable income for households (increased transfer payments or increased casual employment), thus leading to purchase of goods and services increasing aggregate demand. In a similar manner, if there has been a tax cut, the same shal l lead to increase in disposable income in the hands of the salaried individuals, thus increasing the spending or consumption, leading to an increase in aggregate demand. The importance of fiscal policy in bringing stability to the economy has also been recognised because of its ability to affect the amount of total output produced i.e. Gross Domestic Product (GDP). Contrary to the discussion made above, that fiscal policies affect the aggregate demand component and now we say that they affect the supply side of the economy. A closer look at the way in which the fiscal policy works would actually help us understand that fiscal policy affects the aggregate output and the prices of goods and services by actually affecting the aggregate demand. This happens because fiscal policies change the aggregate demand leading to changes in the aggregate supply, thus helping the economy in maintaining demand supply equilibrium. Further, it all depends upon the state of economy when the fiscal measures are taken by the government. If the economy is in the state of recession (i.e. there is continuous fall in the GDP of the economy over a period of time), fiscal expansion measure shall be undertaken by the government. A fiscal expansion measure shall provide people with employment opportunity and thus provide them with wages. The same shall be spent on purchasing of goods and services. This shall bring in money in the hands of entrepreneur and prompt him to kick start the production of goods and services due to the demand generated for the goods and services. Thus, there shall be an increase in the overall output of the economy or increase in GDP of the economy. If the economy is in the state of full employment level (i.e. all the people in the economy are employed and earning), this leads to the problem of excess supply of goods and services. The excess supply of goods leads to reduction in its price and thus a fall in investment. At this point of time, the fiscal policy will have more effect on prices and less impact on total output. A contractionary fiscal policy method shall be adopted which increase the amount of taxes on wages and services. This increase in taxes shall actually reduce the amount of disposable income in the hands of the people. Thus, there will be less spending on goods leading to reduction in aggregate demand for the commodity and thus reducing the aggregate supply as well. Fiscal responsibility is an important part of the government aim of seeing its economy grows over a period of time. Fiscal responsibility can only be achieved with judicious use of the fiscal tools available with the government. The same was realised by the US government when they had plunged into the subprime lending crisis. The main reason for the crisis was people obtaining loans from banks and locking their money in the real estate market. The real estate market was flourishing and people were hopeful of large gains leading to loan settlement. The banks also responded positively to the whole market scenario. Unfortunately, the real estate sector started becoming stagnant with people no longer interested in buying houses at such exorbitant prices. Within days, the real market sector stopped flourishing and in a matter of few weeks, people who had borrowed money from banks, declared themselves unable to repay the loans due to continuous loss. Several banks closed down due to the pr oblem of large NPA (Non-Performing Assets) accumulation and there was rampant unemployment. The situation turned such worse that government had to use its expansionary fiscal policy, in the form of providing bailout package to the banks for sustaining them during the crisis period. This gives us a clear example of the effectiveness of fiscal tools as an important measure to contain economic instability. A stable environment plays an important role in bringing economic growth. In order to achieve the stability, we need to understand the market forces, their mechanism and the factors hey react to. This makes the role of policymakers and the economists very critical. Their main work revolves around understanding the instability before it occurred and undertaking preventive measure to maintain stability. With the stability of the external and internal forces, brings back the confidence of people in their economic system, to invest their surplus in the market. With investments, the economic cycle starts moving leading to growth and welfare. Overall, the ability of fiscal policy to improve employment during recession and reduce the price levels during boom, leads to balanced economy in the short run. The automatic stabilizer tendency of the fiscal policy certainly makes it an effective tool for the government to manage short term instability in the economy. This means that the role of the government becomes essential as the proper use of the fiscal policies shall lead to stable economic growth of the economy. Bibliography Weil, D (2nd), The Concise Encyclopedia of Economics Fiscal Policy, Inflation Policies to control Inflation, Issing, O, Stability and Economic Growth: The Role of the Central Bank, 14th November 2014, Social Democracy for the 21st Century; A post Keynesian Perspective, May 2013, Guru, S, Importance of Fiscal Policy for Economic Stabilization (with diagram),