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ECO 203 Week 3 DQ 1 Government Fiscal Policy .pdf


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ECO 203 Week 3 DQ 1 Government Fiscal Policy

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ECO 203 Week 3 DQ 1 Government Fiscal Policy

Government Fiscal Policy

Between 2007 and 2009 the U.S. economy experienced a severe recession. In an effort to stimulate the
economy, the federal government passed a stimulus package. Explain the federal government’s use of fiscal
policy (the stimulus) to promote growth and employment. Support your ideas with concepts found in the
assigned reading. Include the following in your response:

• Discuss some actions taken by the federal government and whether the recession would have been
longer and the unemployment rate higher if the government had not acted by passing the stimulus package?

• If left alone, do you believe the economy would have corrected itself as suggested by Classical economic
theory? Explain.



Discuss the effect these policies had on increasing the size of the budget deficits and the national debt.

Reference: Chapter 9, section 9.4: More Recent Tax Changes, and Chapter 10, section 10.2: Early 1990s and
2000s Recessions.

Guided Response: Review the discussion board posts of your classmates. Respond to at least two of your
classmates by agreeing or disagreeing with their posts. Support your ideas with concepts found in the
assigned reading


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