How to start with a policy based on government expenditures

Reference no: EM13237127

Assume that you have an economy that is in the early months of a recession. Unemployment is 7.2% and rising. Inflation is at 1.2% and relatively stable at the level. The GDP is at $13.6 trillion. Assume that you are on the Council of Economic Advisors which is the group that advises the President on economic policy issues. It's your job to propose an Expansionary Fiscal Policy to help alleviate the problems associated with the recession.

Start with a policy based on Government Expenditures. Develop a policy that will help get the economy out of the recession using only changes in government purchases of goods and services. You don't need to get into changes in specific programs but you do need to explain whether the spending should increase, decrease or stay the same. Be sure to explain why the policy will be successful.

Reference no: EM13237127

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