3. “A wider commitment to enforce "Buy American" laws”, would it count as positive economics or normative economics? Explain.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

3. “A wider commitment to enforce "Buy American" laws”, would it count as positive economics or normative economics? Explain.

To address the immediate impact of the coronavirus crisis,
Mr Biden has vowed to spend "whatever it takes" to
extend loans to small businesses and increase direct
money payments to families. Among the proposals are an
additional $200 in Social Security payments per month,
rescinding Trump-era tax cuts and $10,000 of student loan
forgiveness for federal loans.
Mr Biden's broader economic policies, dubbed his "Build
Back Better" plan, aim to please two constituencies that
traditionally support Democrats - young people and blue
collar workers.
He supports raising the federal minimum wage to $15
(£11.50) an hour- a measure that is popular among young
people and that has become something of a totem figure
for the party in 2020, and a sign of its move to the left. He
also wants a $2tn investment in green energy, arguing that
boosting green manufacturing helps working class union
workers, who perform most of those jobs.
There is also a $400bn pledge to use federal dollars to
buy American goods, alongside a wider commitment to
enforce "Buy American" laws for new transport projects.
Mr Biden was previously criticised for backing the North
American Free Trade Agreement (Nafta), which critics say
shipped jobs overseas.
His 2020 plan calls for the federal govermment to invest
$300bn in US-made materials, services, research and
technology.
Source: https://www.bbc.com/news/election-u5-2020-53575474
Here additional source:
https://buildbackbetter.com/priorities economic-recovery
Questions
1. Which of Mr. Biden proposals are likely to impact
aggerate demand (AD)? Give one example for each:
what will increase AD and decrease AD. Explain how!
why. [Hint: aggregate demand is composed of
spending: C, I, G, and (X-M)]
2. Which of Mr. Biden proposals focus on impacting
aggerate supply? Give one example and explain how
it will impact AS. [Hint: think AS in terms of USA
economic output (RGDP))
3. "A wider commitment to enforce "Buy American
laws", would it count as positive economics or
normative economics? Explain.
4. "He also wants a $2tn investment in green energy."
What would be the full impact of this investment on
RGDP? Most likely, will it be less than, equal to, or
more than $2tn? Explain.
Transcribed Image Text:To address the immediate impact of the coronavirus crisis, Mr Biden has vowed to spend "whatever it takes" to extend loans to small businesses and increase direct money payments to families. Among the proposals are an additional $200 in Social Security payments per month, rescinding Trump-era tax cuts and $10,000 of student loan forgiveness for federal loans. Mr Biden's broader economic policies, dubbed his "Build Back Better" plan, aim to please two constituencies that traditionally support Democrats - young people and blue collar workers. He supports raising the federal minimum wage to $15 (£11.50) an hour- a measure that is popular among young people and that has become something of a totem figure for the party in 2020, and a sign of its move to the left. He also wants a $2tn investment in green energy, arguing that boosting green manufacturing helps working class union workers, who perform most of those jobs. There is also a $400bn pledge to use federal dollars to buy American goods, alongside a wider commitment to enforce "Buy American" laws for new transport projects. Mr Biden was previously criticised for backing the North American Free Trade Agreement (Nafta), which critics say shipped jobs overseas. His 2020 plan calls for the federal govermment to invest $300bn in US-made materials, services, research and technology. Source: https://www.bbc.com/news/election-u5-2020-53575474 Here additional source: https://buildbackbetter.com/priorities economic-recovery Questions 1. Which of Mr. Biden proposals are likely to impact aggerate demand (AD)? Give one example for each: what will increase AD and decrease AD. Explain how! why. [Hint: aggregate demand is composed of spending: C, I, G, and (X-M)] 2. Which of Mr. Biden proposals focus on impacting aggerate supply? Give one example and explain how it will impact AS. [Hint: think AS in terms of USA economic output (RGDP)) 3. "A wider commitment to enforce "Buy American laws", would it count as positive economics or normative economics? Explain. 4. "He also wants a $2tn investment in green energy." What would be the full impact of this investment on RGDP? Most likely, will it be less than, equal to, or more than $2tn? Explain.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Externality
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education