Module 2 – Case FISCAL POLICY Case Assignment Submit a 4- to 5-page paper that addresses the following questions. Be sure to use references within the paper to support your answers. Show work for all calculations. Which has a larger effect on aggregate demand: an increase in government expenditure or an equal-sized decrease in taxes? Explain your answer. To eliminate a recessionary gap, which fiscal policy should the government pursue? Be specific. The online text discusses fiscal policy in action. Keynesian economics is a school of thought that believes fiscal policy is needed to stabilize the fluctuations in the real GDP. Classical economists such as Adam Smith believe that the economy is most efficient without government intervention. Suppose you are an advisor to a presidential candidate. Which school of thought would shape your economic plan and why? Be sure to use references to support your answer. The majority of lobbying efforts center on fiscal policy. Please discuss your opinions on lobbying regarding whether it is useful and should continue as is, it should continue but with constraints to limit how much is done, or it should be eliminated. Assignment Expectations Use information from the modular background readings as well as any good quality resource you can find. Make sure you cite all resources you use and provide a reference list at the end of your paper. Length: 4–5 typed and double-spaced pages. In addition to the overall quality, depth, grammar, and organization of the paper, the following will be assessed: The level of your understanding of the key concepts of the major macroeconomic indicators. Some in-text references to modular background readings (APA formatting encouraged). Upload your assignment to the Case 2 drop box when completed.

    Problem solving


    Institution affiliations



    Question 1

    Comparing synod consumeing and frugal allegianceation, synod charge extension succeed entertain a eminent bearing require issue than an equal-sized subparty in allegiancees. These brace policies consist on allegiance multipliers. Synod consumeing is eminent that than the allegiance issue; this is accordingly integral synod consumeing extensions require restraint pi and services, increasing bearing require. Solely a minority of allegiance harmonization goes towards the whole require. The allegiance issue is solely monstrous disunite, a final consistency that is consumable, and the crowding quenched issue. The synod consumeing is a compute that shows issues of consumeing on represseveryowance agitate and decrement. A subparty in allegiance succeed entertain a harmonious issue on bearing require as synod consumeing. However, the multiplier of charge is eminent than the fiscal multiplier. That why the consumeing gives a eminent bearing require. Subordinate synod consumeing, there is straightforward purchasing of products and the unmeasured charge gist is headed towards whole require. When allegiancees are subsided, some of the represseveryowance is saved conjuncture the other proceeds goes to the bearing require. Accordingly, referconducive attributconducive attributconducive attributconducive integral allegianceed coin and charge go to the whole require.

    When we contemplate at how synod consumeing is fitted and how allegiance multiplier is fitted, we referconducive attributconducive attributableice that the synod charge is repressforever on the unequivocal party conjuncture the extensiond allegiancees are on the disclaiming. A fintegral in allegiancees extensions the bearing require. The allegiance extension is monstrous by the edge and the magnitude of the severs (Galí, López‐Salido, & Vallés, 2007). Crowding issues are caused by extensiond represseveryowance and extensiond require restraint coin, hereafter increasing the concern rates.

    Decreased allegiancees succeed straightforward to a eminent bearing require accordingly appropriater compute is deduceconducive than synod charge. When allegiancees are frugal, the appropriater consumeing descends. The desire vocconducive issues if this straightforwards to inflation.

    Question 2

    Expansionary fiscal management is the most appropriate monetary management the synod should verification to exclude a recession failure. This classification specializes in increasing synod consumeing and decreasing or lurid allegiancees in the province. When a recession occurs in a detailize, then the expansionary management is at its best. The recession has issues on the recession failure and the bearing require. It extensions a recession failure. This resources that the whole require is scant compared to its magnitude in unmeasured avocation scenario. Accordingly, the synod succeed extension its charge which has a straightforward impression on the bearing require flexion (Blanchard, & Perotti, 2002). The whole require goes tall accordingly synod consumeing extensions require restraint pi and services in the province. Again, the synod succeed subparty allegiancees which subsides appropriater charge. The customers succeed be integralowed to entertain further coin to appropriate and endue. The discard in allegiancees has an irreconcilconducive issue on bearing require. It extensions the whole require. These changes succeed restraintce the require flexion to transfer to the fit hereafter stagnation the recession failure. The expansionary management impressions and issues succeed succor the distribution bring-about-ground.

    In blank, subordinate the fiscal management, dip happens affect brace locality continuous eras in a year. It is era-based. It may catch an exceeding determination precedently the recession is referconducive attributconducive attributableiced in a is monstrous by idle era. Some stipulations may equconducive acquire past withquenched species certain (Yergin & Stanislaw, 1998). The expansionary management succeed catch era precedently its unmeasured results are implemented. Integral fiscal policies as-well catch the era to unmeasured implementation. They are inferior and inferior by legislative and authoritative policies. However, It is no conviction that customers succeed result to the management changes unequivocally. Sometimes they may suit disclaimingly. Allegiancees decrease may inflame appropriaters, yet extensiond Synod charges extension bearing require and prices. Integral this load is left on the province’s townsmans to treat. It is the allegiance of a countries synod to run when these policies are to be catchn. Fiscal policies are verificationd to straightforward a province’s distribution to a disuniteicular straightforwardion.

    Question 3

    As a presidential confessor, I would verification the Keynesian economics. I value that fiscal management can repress a countries GDP to either party. The synod moderate in its distribution succeed repress the bearing require flexion to the predetermined straightforwardion. If the synod is well-behaved-behaved organized, then it succeed unmeasuredy instructor and stabilize GDP in a two of era (Fölster, & Henrekson, 2001). The synod is constantly suited in a province, and it can easily repress the GDP. Most eras, the townsmans of a province succeed result to the fiscal policies unequivocally, and this succeed stabilize the distribution at any absorbed era.

    Expansionary monetary management and contractionary fiscal policies can result abutting each other and comfortably maintain a countries economies. The synod can pick-extinguished to consume further and sever allegiancees. It can as-well sever its charge and extension allegiancees to contrimpress an inflation failure (Yergin & Stanislaw, 1998). These impressions succeed consist on the county’s economic detailize. The policies repress the bearing require flexion by transfering it to the fit to contrimpress recession failure and melting it to the left to contrimpress inflation failure. Accordingly, I apprehend the synod can be verificationd to repress and stabilize a countries GDP straightforwardly.

    Question 4

    I apprehend lobbying ios verificationful and should remain with the fashion it is carried. First, lobbying is referconducive attributconducive attributconducive attributconducive bribery. It is a performance done by a clump of tribe who are edictfully registered with the synod, to exigency the synod into open some local roles and impressions. Lobbying is edictful from the fundamental edict and Democracy is subordinate Amendment shelter in the United Detailizes Constitution, to request the synod restraint a readdress of grievances (Broscheid, & Coen, 2007). There is the fit to lobby. Lobbying is as-well protected subordinate Lobbying Disclosure Impress of 1965. It detailizes the roles of lobbyists, and what they should referconducive attributconducive attributconducive attributconducive do to abandon penalties. It as-well provides the gregarious lobbying fits.

    Lobbying is deduceconducive accordingly extensions path to synods legislators, integralows living-souls to bring-abextinguished concerns in jurisdiction and to distinguish the jurisdiction of computes, and it is an educative machine. Withquenched lobbying, then the synod would referconducive attributconducive attributconducive attributconducive be conducive to condition quenched the incongruous concerns of its multifarious townsmans. Lobbying succors resident’s path detailize’s conclave, and withquenched it, no one townsman would finish that. Lobbyist clump themselves into clumps and reproduce-exhibit multifarious tribe’s concern (Keynesian Apprehending. Khan Academy. Retrieved March 2016). They are accordingly easier to be heard and befriended by the synod conclave other than a one point. Integral lobbying issues are viewed as a focal top by the synod. Accordingly it succeed deduce the concerns accordingly it has a hale tail foundation.

    Lobbying shows jurisdiction in computes. A clump of lobbyists reproduce-exhibit multifarious concerns of townsmans and impress as a one e opinion. The synod succeed deduce them other than an point townsman whose opinion may nforever be heard or impressed upon by the synod. Lobbying is educative accordingly lobbyist presents their disuniteicular issues and ideas to the synod conclave (Keynesian Apprehending. Khan Academy. Retrieved March 2016). They do a fate of discovery and analyses on the issues precedently submitting them. Accordingly, I foundation lobbying accordingly it is edictful and quantitative restraint a province’s townsmans.


    Galí, J., López‐Salido, J. D., & Vallés, J. (2007). Subordinatestanding the issues of synod consumeing on decrement. Journal of the European Economic Association, 5(1), 227-270.

    Blanchard, O., & Perotti, R. (2002). An tentative characterization of the dynamic issues of changes in synod consumeing and allegiancees on quenchedput. the Localityly Journal of economics, 117(4), 1329-1368.

    Fölster, S., & Henrekson, M. (2001). Bring-about-groundth issues of synod charge and allegianceation in affluent countries. European Economic Review, 45(8), 1501-1520.

    Broscheid, A., & Coen, D. (2007). Lobbying impressivity and restrainta falsehood in the EU: tentatively exploring the species of the management good-tempered. Journal of European Public Management, 14(3), 346-365.

    Keynesian Apprehending. Khan Academy. Retrieved March 2016 from

    Yergin, D., & Stanislaw, J. (1998). The Chicago School. In D. Yergin, & J. Stanislaw, Commanding Heights (pp. 145-149). New York: Simon & Schuster. Retrieved from