Reading Guide: Section 4 Module 20
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1.  How is stabilization policy different than the "self-correction" model? *
2.  Summarize the main reasons (2) why stabilization policy may be more desirable than self correction. *
3. How could stabilization policy possibly create more instability? *
4.  Read "FYI" above.  Why is it safe to say that the economy has been more stable since we began stabilization policies? *
5.  How  does the US compare to other nations when it comes to spending as a percentage of GDP versus government tax revenue? *
6.  Which type of tax makes up the largest percentage of taxes collected? *
1 point
7.  Why are Medicare/Medicaid and Social Security considered "entitlement" programs? *
8.  What is the difference between medicare and medicaid? *
9. What parts of GDP can the government influence?   *
1 point
Required
10.  Why was the Economic Stimulus Act of 2008 a "classic example" of fiscal policy? *
11. What would be an appropriate fiscal policy for the economy in Figure 20.4 *
12. What would be the appropriate fiscal policy for Figure 20.5? *
13.  Explain how lags make the implementation of fiscal policy a challenge. *
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14.  What questions do you have for class?
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