econ wksht wk 8

pdf

School

University of Massachusetts, Amherst *

*We aren’t endorsed by this school

Course

111

Subject

Economics

Date

Jan 9, 2024

Type

pdf

Pages

Uploaded by ChiefKnowledge8504

Sarah Tabani 33843706 Worksheet week 8 1. What is discretionary fiscal policy? Give examples of recent discretionary policies that were implemented during the Covid-19economic crisis. (Class slides, RWM ). What are other fiscal policy options that could have been used instead or in addition to these policies? Discretionary Fiscal Policy is when changes are intentionally made to the government spending and taxation with the aim to influence the overall economic activity. It is called ‘discretionary’ since these policies are not automatically set by laws that already exist, rather they are put into place by policymakers. When the Covid-19 economic crisis hit, governments around the world implemented various discretionary fiscal policies to help with the economic challenges that were being faced at the time. One of the recent discretionary policies that were put into place was the stimulus packages that were introduced to help boost the economic activity in countries. This included direct payments sent to individuals, grants and loans to businesses and unemployment benefits that were better than usual. Specifically in the United States, the CARES act which was a $2.2 trillion economic stimulus bill, was introduced through which the government sent direct payments to individuals and families and even helped support businesses. Another example would be the tax relief that was introduced. Tax deadlines were extended and tax breaks were introduced to provide families and businesses with financial relief in such times of difficulty. Additional funds were allocated to help and strengthen healthcare systems to assist with the public healthcare system during the pandemic. And lastly, governments showed support for businesses in the entertainment sector by offering them grants to help during the economic crisis that the pandemic caused. Additionally, policies such as targeted support for groups that were more susceptible to being affected by the pandemic than others, could have been introduced. This could include low-income groups, people already facing food and housing insecurity, or the homeless, the list could go on. Next, steps could have been taken to decrease the stress of individuals for their student debts or families and businesses that were struggling with debts or those that were particularly hit hard by the economic crisis. The pay off dates could have been delayed or the overall debt could have been decreased somehow. Another policy that could have been introduced could be that money could have been invested into education in individuals on how to be skilled in multiple areas so that they wouldn't be as affected by the changing job market, as they were at the time. 4. In the three sector Keynesian Model, please solve the following values:

C = 1000 billion + .5 Yd. I = 3300 billion G = 3300 billion TR = 300 billion. T = .25Y Yd = Y – T + TR 1. Solve for equilibrium income. Y = C + I + G Y = (1000 +0.5(Y - 0.25Y + 300)) + 3300 + 3300 Y = 1000 + 0.25Y + 150 + 6600 Y - 0.25Y = -8250 Y = 11000 Billion = the initial equilibrium income 2. Now, it falls to 2800; and Autonomous consumption falls from 1000 to 650. What happens to equilibrium income? The new consumption equation would be C = 650 + 0.5Yd Y = (650 + 0.5(Y - 0.25Y + 300)) + 3300 + 3300 Y = 650 + 0.25Y +150 + 6600 -0.75Y = -8400 Y = 11200 Billion is the new equilibrium income. 3. How much do transfer payments need to go up to get the equilibrium level back to the level in a? TP = change in transfer payments Y = (650 +0.5(Y - 0.25Y +300)) + 3300 + 3300 = Y O.25Y - Y = -8400 + TP -0.75Y = -8400 + TP Y = 11200 - 1.33TP Y = 11000 = Initial equilibrium income

11000 = 11200 - 1.33TP TP = 150 billion To get the equilibrium level back to 11,000 billion, the transfer payments need to increase by about 150 billion. 5. In RWM 6.1 (on Perusall), what does Amanda Page Hoonjagrok argue the Federal Government should do (have done) in terms of support to states? Amanda Page Hoonjagrok argued that the Trump administration should have been more proactive when it came to extending help to all of the states during the outbreak. This is in relation to the economic stimulus program that was introduced by the United states after the Great Recession. The value of this stimulus totaled up to 787 billion dollars. The American Recovery and Reinvestment Act of 2008 (ARRA) signed by President George W. Bush was introduced by the United States Congress. The objective of the ARRA was to help recover the damaged economy all while preserving employment opportunities during the recession. This act was able to help the suffering economy during that time. The allocation of the large amount of money was sufficient enough to help the states recover from the economic crisis. However, in 2020 when the pandemic hit, Donald Trump introduced his own stimulus act in order to attempt to save the economy, but on a much lower scale, which is what Hoonjagrok is talking about. She felt that the amount of money produced to help the states was not enough, and that he could have done much more to help. For this, the federal government only gave out money that added up to $150 billion, to state and local governments. She felt that additional funding could have been provided to the governments to help them recover. Besides that she argued that the Trump administration wasn't as involved as it should've been. They could have gotten into closer contact with the state governments to see the exact funding they needed, and given the desired amount. They could have provided the necessary resources to the states that way, and helped them recover from the effect of the pandemic much faster. Hoonjagrok expressed the same feelings that most of the public did towards the Trump administration. They all felt that the pandemic was not taken as seriously as it should've been resulting in them being unable to help the country adequately. All these thoughts were true, because the administration response to the great Depression was much bigger and better than the response to this. $787 billion compared to $150 billion shows how careless the Trump Administration was at the time.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Related Documents

Assignment - Networks and place. docx-2.docx

Assignment-Policy-2.docx

hw3section1q1.jpg

ECON 1103 In-class Assignment #15.pdf

Screenshot (317).png

Econ 340 homework 4-3 Maribel. Perez.doc

econ extra cred wksht week 13.pdf

Assigment #4 - APPLIED STATISTICS.pdf

CFUMemo#12.docx

CFUMemo#8.JoseDiaz.docx

HW Minor - Data Analysis.docx

midterm review questions 2023 .pdf

Recommended textbooks for you

Exploring Economics

Economics

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:SAGE Publications, Inc

Principles of Economics 2e

Economics

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:OpenStax

ECON MACRO

Economics

ISBN:9781337000529

Author:William A. McEachern

Publisher:Cengage Learning

Macroeconomics: Private and Public Choice (MindTa...

Economics

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:Cengage Learning

Economics: Private and Public Choice (MindTap Cou...

Economics

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Cengage Learning

SEE MORE TEXTBOOKS

Recommended textbooks for you

Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
ECON MACRO
Economics
ISBN:9781337000529
Author:William A. McEachern
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning