Unit 7: Assignment – Core Assessment Part 3 of 3: Macroeconomics Analysis of a Pandemic – The Government’s Response to COVID-19

Introduction

The COVID-19 pandemic wreaked havoc on the global economy in an unparalleled fashion. Each step of this three-part core assessment will challenge you to apply key macroeconomic theory concepts to this real-world case study (that we all lived through). In this unit, you are tasked with analyzing the US government’s reaction to the pandemic through the lens of macroeconomic theory regarding fiscal and monetary policy.

CLO 6 – Define “expansionary” and “contractionary” fiscal policies; use the Aggregate Demand and Aggregate Supply Model to illustrate and explain appropriate fiscal policy and its impacts on the price level and real GDP.

CLO 8 – Identify the goals and tools of monetary policy; use the Aggregate Demand and Aggregate Supply Model to illustrate and explain appropriate monetary policy and its impacts on the price level and real GDP.

Directions

Submit a journal entry (a doc or .pdf file) that thoughtfully addresses each of the following bullet points. This assignment does not have a minimum word count but will likely be upwards of 400 words in order to meet the requirements of the “Excellent” rubric criteria.

1. Briefly synthesize (4-6 sentences) the 2020 fiscal policies implemented by the US government as a result of COVID-19.
2. Briefly synthesize (4-6 sentences) the 2020 monetary policies implemented by the US government as a result of COVID-19.
3. Were these policies expansionary or contractionary in nature? Why?
4. Which type of policy – fiscal or monetary – do you feel was most impactful 2020? Why?