Analyzing Current Fiscal Policy

Fiscal policy is the government’s use of government spending and taxes to influence the economy. For this task, you will choose one tool of fiscal policy—either government spending or taxes—and complete the activities below.

Part A

Which tool did you choose?

Part B

Do you think this tool should be increased or decreased to help the economy?

Part C

Using an Internet search engine, find a website or an article that shares your opinion and copy the URL in the space below. Keep in mind that it might take you some time to find a good article, so don’t automatically take the first one you find.

Part D

List three main points from the source you found that explain the author’s reasoning.

Part E

Based on what you have read, what bias might the author bring to his or her opinion?

Part F

Using an Internet search engine, find a website or an article that expresses the opposite to your opinion and copy the URL in the space below. Keep in mind that it might take you some time to find a good article, so don’t automatically take the first one you find.

Part G

List three main points from the source you found that explain the author’s reasoning.

Part H

Based on what you have read, what bias might the author bring to his or her opinion?

Solution Preview

Fiscal Policy; Taxation

Part A: My Choice

The selected tool is the government taxes.

Part B: My Opinion

In general, the economy is influenced through taxation by determining the amount of money to be spent by individuals and by the government. In my opinion, I think to better help the economy in the long run, the Tax rate should be increased. However, it should be noted that an increase in taxation has negative short-term consequences including decreased productivity, stagnant government tax revenue among others. However, when evaluated in long-term contexts, increase in taxation is highly beneficial to the economy.

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