Use the AS AD diagram when answering this discussion question. A person states ... "To be honest, I don't get why the government handed out stimulus checks in 2020 and 2021. The IRS issued three Economic Impact Payments during the coronavirus pandemic for people who were eligible: $1,200 in April 2020 $600 in December 2020/January 2021 $1,400 in March 2021 know that consumers decreased spending a lot because of the economic problems from the recent pandemic economic shock and the consumer confidence decreased a lot and business confidence decreased a lot. But, was the $1.9 trillion stimulus really needed?" Please explain to this person why the government did so by applying the Keynesian perspective. Include an AS AD diagram and an explanation.
Always use the economic terms, diagrams and concepts we are learning this week to earn full credit.
Use the AS AD diagram when answering this discussion question.
A person states ...
"To be honest, I don't get why the government handed out stimulus checks in 2020 and 2021.
The IRS issued three Economic Impact Payments during the coronavirus pandemic for people who were eligible:
- $1,200 in April 2020
- $600 in December 2020/January 2021
- $1,400 in March 2021
know that consumers decreased spending a lot because of the economic problems from the recent pandemic economic shock and the consumer confidence decreased a lot and business confidence decreased a lot. But, was the $1.9 trillion stimulus really needed?"
Please explain to this person why the government did so by applying the Keynesian perspective. Include an AS AD diagram and an explanation. (Hint: you might first start a AS AD model and have the AS line and AD line create an equilibrium near full employment. Explain and show what happens to shift the AD line left - include the result on
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