Assignment 1: Economic Policies and PracticesThe policies of the federal government influence the...

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Assignment 1: Economic Policies and Practices
The policies of the federal government influence the outcomes of the various activities in that economy. When government policies change or unplanned events occur, the resulting economic events or activity will usually change. Listed below are several policies or events that affect the performance of the economy:

The federal government employs a budget plan over several fiscal years that results in significant increases in the national debt, with no relief or plans to deal with the problem.
The federal government enacts new tariffs and quotas on all imports.
The general public loses confidence in their leadership, in terms of their ability to manage the economy, especially in the area of job creation.
The federal government, in an effort to stimulate the economy, decreases taxes on all individuals except those earning over $250,000 per year.
The level of investment decreases because of a lack of confidence in the economy.
Interest rates are kept artificially low by the Federal Reserve for several years.

Required:
For each of the items above, describe what would be the likely outcomes in the economy. Use the appropriate tools of analysis, such as aggregate demand and aggregate supply where appropriate, to justify and explain your answer.
Deliverables:

Submit an 3-6 page paper in Microsoft Word format, to the W5: Assignment 1 Dropbox by Saturday, June 15, 2013, addressing the above-noted items.
Create a Microsoft PowerPoint presentation of 5-10 slides that summarizes your findings in your report. Post your presentation in the Assignment 1 Discussion Area by Saturday, June 15, 2013.
Comment on at least two other presentations and identify the strengths and weaknesses of each.

Name your documents SU_ECO2072_W5_A1_LastName_FirstInitial.
All submissions must be original and all resources must be acknowledged.
Principles of Economics Mankiw ,
Mankiw (02/15/2011). Principles of Economics, 6th ed. (Mankiw) [6] (VitalSource Bookshelf), Retrievedfromhttp://digital bookshelf. South university.edu/books/ XXXXXXXXXX/id/ch01l

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Robert · Accepted Answer

1. The federal government employs a budget plan over several fiscal years that results in 
significant increases in the national debt, with no relief or plans to deal with the problem. 
Answer: 
Rising national debt is not good for a particular economy. It has many ramifications for the 
economy, which can be listed as follows; 
a) It leads to devaluation of currency because of attraction of hot money due to higher 
interest rates 
b) The country will be pushed to a position where abroad countries won’t supply even 
essentials to it. 
c) Investments sink and economy turns out in a recession, like the Greece 
d) The government cut services and increases taxes so that the deficit gets reduced.  
e) A large public debt increases the financial burden on the future generation.  
f) It increases the nation’s dependence on the foreign country  
g) It often causes higher inflation. 
h) It threatens sovereignty of a state by making it more vulnerable. Moreover, it reduces 
creditworthiness of the nation and provide a negative image to the global investors.  
2. The federal government enacts new tariffs and quotas on all imports. 
Answer: 
When Federal government enacts new tariffs and quotas on all imports,

Assignment 1: Economic Policies and Practices The policies of the federal government influence the outcomes of the various activities in that economy. When government policies change or unplanned...

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