Fiscal Policy

Fiscal Policy

Q1.) What the heck is this fiscal thing? You are sitting at dinner with your family while watching the news. A news reporter states, “The National Bureau of Economic Research, which is a government agency, has announced that the country is in a recession. In response to this update, the government has announced a change in its fiscal policy to prevent further damage to the economy”. Because they know that you are enrolled in an economics class, your family members look at you and ask you the following: This seems serious, but what is a recession, and why is it bad? What is meant by fiscal policy? And how is this fiscal policy going to help the economy? APA.

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Fiscal Policy

Q2.) How are they the same if they are different? You help your neighbor paint her house, and she decides to pay you $100 for helping her. She pulls two bills out of her pocket, a $1 bill and $100 bill to pay you. Then she looks at you and asks the following questions: These two bills have the same size and are made of the same material, but one of them is worth more.

Why? If the $100 has very little material value, how does it keep its value (purchasing power) tomorrow or next month? If money is good for the economy, what would happen if the government printed more money and gave each person in the country $50,000? Wouldn’t this be awesome?Why? If the $100 has very little material value, how does it keep its value (purchasing power) tomorrow or next month? If money is good for the economy, what would happen if the government printed more money and gave each person in the country $50,000? Wouldn’t this be awesome?

Fiscal Policy

References U.S. Bureau of Labor Statistics (2022, July 18). Consumer prices up 9.1 percent over the year ended June 2022, largest increase in 40 years. https://www.bls.gov/opub/ted/2022/consumer-prices-up-9-1-percent-over-the-year-ended-june-2022-largest-increase-in-40-years.htm#:~:text=Consumer%20prices%20up%209.1%20percent,U.S.%20Bureau%20of%20Labor%20Statistics.References U.S. Bureau of Labor Statistics (2022, July 18). Consumer prices up 9.1 percent over the year ended June 2022, largest increase in 40 years. https://www.bls.gov/opub/ted/2022/consumer-prices-up-9-1-percent-over-the-year-ended-june-2022-largest-increase-in-40-years.htm#:~:text=Consumer%20prices%20up%209.1%20percent,U.S.%20Bureau%20of%20Labor%20Statistics.