Assignment: The United States Fiscal Policy
Length: 3 to 4 pages.
I. Discuss the expected impact the increased levels of government spending would have on output / GDP, unemployment and inflation in both the short and long run, using the model of aggregate supply, and aggregate demand.
II. Compare the impact on GDP, output, and inflation caused by increased spending versus decreased taxes in the American Recovery and Reinvestment Act of 2009.
III. Discuss at least two issues and risks to the economy of the increased budget deficit associated with the increased levels of government spending and decreased taxation contained in the act.
IV. Include three external peer-reviewed sources to support your position.
i. Explain the components of aggregate expenditure as elements in developing a theory of aggregate demand.
ii. Evaluate the relationships between the concepts and models related to aggregate supply and demand, explaining their ability to function in the short term and the long term.
Format your assignment according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.