Between 2007 and 2009 theU.S.economy experienced a severe
recession.Â Â In an effort to stimulate the economy, the federal
government passed a stimulus package. Explain the federal
governmentÂ’s use of fiscal policy (the stimulus) to promote growth and
employment.Â 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
If left alone, do you believe the economy would have corrected
itself as suggested by Classical economic theory?Â Explain.
Discuss the effect these policies had on increasing the size of the
budget deficits and the national debt.
Reference:Â Chapter 9, section 9.4: More Recent Tax Changes, and
Chapter 10, section 10.2: Early 1990s and 2000s Recessions.Â