Suppose we wanted to use fiscal policy (a change in taxes OR a change in government spending) in order to stimulate the economy. If we were concerned about the impact on the government’s budget deficit, which policy option should we choose?  Explain your reasoning.

Congress recently passed and President Biden signed the American Rescue Plan (ARP), which will add $1.9 trillion to the federal deficit over the next ten years. Even before this new spending, federal debt held by the public was slated to reach 107% of GDP by 2031, the highest in history. What do high deficits mean going forward?

What should government do with its spending and taxes during a recession? Why?

In the context of budget deficits, what is crowding out?

Please answer all 4 questions below: If fiscal budgets don’t need to balance, what should we be trying to balance in an economy? Explain how a government deficit is society’s surplus. If we don’t care about the size of the “deficit”, then is there NO limit on government spending? How does MMT advise that the above problem be handled?

A friend of yours argues that federal government spending is out of control and significant cuts in spending are needed to reduce the size of the government. She tells you that if we cut federal government spending on research and foreign aid, it will really reduce the size of the government. Refer to Figure 2 in the text for information on the budget. a. What percentage of federal government spending comes from research and foreign aid? b. How much will the federal government spend on research and foreign aid if the federal government's total spending is $1.2 trillion.

The government has many tools at its disposal to help create stability for an economy. Explain the best type of fiscal policy for our economy right now. Analyze how the economy is doing and provide support for the type of fiscal policy you selected.

The Effects of Fiscal Deficits on an Economy.

Which of the following best describes a fiscal policy tool? 1. Government spending II. Government taxes III. Interest rates. IV. Bank lending V. Financial capital markets I and II I and VI III, IV, and V

How was the recession in 2020 different than the recession in 2008? What was the government response in 2008 vs. 2020? How much was spent on stimulus in 2008 vs. 2020 (be sure you are looking at inflation-adjusted numbers)? Compare and contrast some of the major stimulus programs put in place in 2008 and in 2020. Was the government more successful in 2008 or 2020? Why