Reference no: EM133990851
Assignment:
Joe Biden: Where does he stand on key issues?
To address the immediate impact of the coronavirus crisis, Mr Biden has vowed to spend "whatever it takes" to extend loans to small businesses and increase direct money payments to families. Among the proposals are an additional $200 in Social Security payments per month, rescinding Trump-era tax cuts and $10,000 of student loan forgiveness for federal loans.
Mr Biden's broader economic policies, dubbed his "Build Back Better" plan, aim to please two constituencies that traditionally support Democrats - young people and blue collar workers.
He supports raising the federal minimum wage to $15 (£11.50) an hour - a measure that is popular among young people and that has become something of a totem figure for the party in 2020, and a sign of its move to the left. He also wants a $2tn investment in green energy, arguing that boosting green manufacturing helps working class union workers, who perform most of those jobs.
There is also a $400bn pledge to use federal dollars to buy American goods, alongside a wider commitment to enforce "Buy American" laws for new transport projects. Mr Biden was previously criticised for backing the North American Free Trade Agreement (Nafta), which critics say shipped jobs overseas.
His 2020 plan calls for the federal government to invest $300bn in US-made materials, services, research and technology.
Questions
- Which of Mr. Biden's proposals are likely to impact aggregate demand (AD)? Give one example for each: What will increase AD and decrease AD? Explain how/ why. [Hint: aggregate demand is composed of spending: C, I, G, and (X-M)]
- Which of Mr. Biden's proposals focus on impacting aggregate supply (AS)? Give one example and explain how it will impact AS. [Hint: think
- AS in terms of USA economic output (RGDP)]
- Mr. Biden's proposal of "a wider commitment to enforce "Buy American" laws", would it count as positive economics or normative economics? Explain.
- "He also wants a $2tn investment in green energy." What would be the full impact of this investment on RGDP? Most likely, will it be less than, equal to, or more than $2tn? Explain.