Tag: Fiscal Policy

You are required to write two essays that should have a minimum of 1000 words and should not exceed 1500.  The essays should be completed in .doc, .docx or .rtf format using MLA.  The essays are not meant to be research papers. They are summary reports that link topics you have been learning in class to current economic news found in media articles. The basic idea of this exercise is to allow you to read, think and write on a topic of your choice while relating basic theory to real life.

Essay Topics- The broad general topic should be something involving Macroeconomics.  You might wish to go through the table of contents or index of our textbook early in the course and identify a topic that interests you. For essay # 2 you can again focus on the broad topics of economic growth, unemployment, inflation, as well as on issues of fiscal policy, money, the financial system, savings, investment, monetary policy, and macroeconomic stabilization.

After you have selected a topic it might help to browse through media. Good sources for economic news include periodicals such as Businessweek, The Economist, Fortune, or others. Newspapers such as the Wall Street Journal, New York Times, Washington Post, Christian Science Monitor are also good sources for current economic news articles.

Once you have identified a topic of interest, selected and read articles for review, and thought about how they are linked to the material learned in the class, you will write your report. It is suggested you follow the guidelines noted below when writing the essays.

Suggested Essay Format:

INTRODUCTION.  The introduction states the reason(s) why your topic deserves consideration.  In other words, why is your topic relevant and why is it of interest to the the public.
SUMMARY OF RESEARCHED ARTICLEs. Each article should be summarized separately.  At the beginning of each summary, please state the author, the title, the source of the article, and the date it was published.  Do not start a new page with each summary. Also, consider that the articles you select must have a common theme or topic. They can’t be randomly selected articles on Macroeconomics.
TEXTBOOK CONNECTION.  Search through your textbook and obtain all information that relates to your topic.  Show how the articles supported or contradicted information in your textbook.
EVALUATION AND CONCLUSION.  In this section you should state assess the topic.  How does this topic relate to your life now and in the future?  How does this topic affect you or a particular business or industry?

THE BOOK SOURCE IS PRINCIPLES OF MACROECONOMICS 2E

In your own words define and explain fiscal policy. List the pros and cons for the fiscal policy you selected. Include supply-side economics in your explanation. As you think through your answer, remember the government may exercise expansionary or restrictive fiscal policy.
Research one specific real-life example of a fiscal policy and explain its overall impact on the economy. In your example, discuss any political influences.

In your own words define and explain fiscal policy. List the pros and cons for the fiscal policy you selected. Include supply-side economics in your explanation. As you think through your answer, remember the government may exercise expansionary or restrictive fiscal policy.

Fiscal policy refers to the changes in government’s choices regarding the overall level of government spending and taxes to influence the behavior of the economy. Fiscal policy can expand or contract aggregate demand. The government sometimes uses the fiscal policy instruments in an attempt to stabilize the economy. Under a recession, an expansionary fiscal policy is adopted, which involves lowering taxes and/or increasing government spending. In an overheated expansion with an inflationary pressure, a contractionary fiscal policy is utilized, which requires higher taxes and/or reduced government spending. Economists and policymakers disagree about how active the government should be in these fiscal policy efforts.

Based on the above summary and the detailed descriptions of the fiscal policy issues in the textbook (Chapter 33) discuss the following questions:

What are the expansionary and contractionary fiscal policies? What are their policy instruments? How are they used to deal with the inflationary gap and recessionary gap? Which do you think is more appropriate today?
Should the government balance its budget? If you think it should, what steps do you suggest that it take to balance its budget?
What is the relationship between budget deficits and national (public) debt? Why the U.S. national debt has been increasing for decades?
Should the tax laws be reformed to encourage saving? Do you think consumption tax is better than income tax?