09 Nov Do some research about our last recession in 2007-2009 (or choose any other recession since the Great Depression) or the current COVID-19 pandemic and recession and answer the questions below.
Purpose: The purpose of this assignment is to gain a deeper understanding fiscal policy and how the U.S. President and Congress can use fiscal policy to intervene in the economy in response to a recession.
Skills: This assignment should help you understand how to apply fiscal policy using the AS/AD model in response to a recessionary gap. This assignment should also help in the development of your written communication skills, including organization, presentation and analysis.
Knowledge: This assignment should help you develop a deeper understanding of fiscal policy and the role government plays in formulating policy to counteract recessions. It will also help you to understand what happens to taxes and spending during a downturn in the economy and whether the government should balance their budget during a crisis.
Task: Please answer the questions in 1-2 pages of writing (total), about 250+ words. Include a detailed explanation and be sure to proofread for typos and grammar errors (or you can easily run Spell and Grammar Check in Word in the Review tab). Remember, one-sentence answers do not receive credit in this course. You should have a paragraph or more for each question. Please number your answer to each question.
Fiscal Policy
For various reasons, fiscal policy changes automatically when output and employment fluctuate:
Do some research about our last recession in 2007-2009 (or choose any other recession since the Great Depression) or the current COVID-19 pandemic and recession and answer the questions below. See the textbook readings and the power points to help you to answer the questions.
Address the following topics in your analysis in your own words and answer each question in detail:
A. How did the federal government (President and Congress) respond to the recession?
B. What types of fiscal policy did they use (explain in detail and provide an example)?
C. Explain why tax revenue changes when the economy goes into a recession.
D. Explain why government spending changes automatically when the economy goes into a recession.
E. If the government were to operate under a strict balanced-budget rule, what would it have to do in a recession? Would that make the recession more or less severe? Explain.
F. How do political party politics impact stabilizing fiscal policy (you can think of our current Coronavirus situation as an example)?
Please follow the instructions carefully and use the textbook and power points to help you to answer the questions.
Criteria for success:
1. Follow all instructions carefully.
2. Write the minimum writing requirement of 250+ words and organize your answers according to question number.
4. Make sure your answers are correct and well-explained (about a paragraph per question).
