I got a 7 for my Economics HL Macroeconomics Internal Assessment. The topic was related to Fiscal Policy, Multiplier Effect, Budget Deficit, and National Debt.
Fiscal policy is the government’s manipulation of its own expenditure and taxes to influence the level of Aggregate Demand (AD). Trump proclaimed to cut corporate and income tax while increasing government spending on infrastructures and defense systems to shift AD rightward both directly and indirectly, expansionary fiscal policy. Along with rightward shifted AD, the policy has supply-side effect. Investment in capital increases efficiency while lowering the cost of production, thus the productive capacity of the economy increases thereby shifting Long Run Aggregate Supply (LRAS) rightward. U.S economy’s ultimate goal of implementing Trumponomics is to achieve economic growth -which occurs as LRAS shifts rightward to increase real potential output. However, the effectiveness of fiscal policy in the United States now in 2017 is being questioned due to US’ excessive national debt.
Trumponomics’s one major source of injection is government spending on infrastructure. “…Building a wall along the US-Mexico is estimated to cost between $12billion and $25billion”. Direct government spending would shift AD outward by around $20billion…
- Total number of pages: 10 pages
- Topic: Fiscal Policy, Multiplier Effect, Budget Deficit, and National Debt.
- Subject: Economics
- The file is in PDF format.