ECON 211 Week 7 Discussion: Recessionary or Inflationary Gap?
Assignment Content
Is a recessionary or inflationary gap bad for an economy? Have you ever wondered how the federal government and the Federal Reserve react to smooth out recessionary and inflationary gaps? In this activity, you will explore the concepts of fiscal policy and the attempts the U.S. government takes when the U.S. economy is in a recessionary or inflation gap. You will discuss the concepts of aggregate supply and aggregate demand to determine how the U.S. economy can work its way back to long-run equilibrium based.
Locate a recent article (published within the last year) that discusses fiscal policy and whether the U.S. economy is in an inflationary or recessionary gap. You can use the Hunt Library, newspapers, new stations, or other credible sources to locate an article. Analyze the article and then address the following concepts in your discussion.
- Interpret recessionary and expansionary gaps within the economy.
- Explain the inter-workings of fiscal policy tools.
- State how taxation and government spending works.
- Differentiate between fiscal and monetary policy.
- Demonstrate the mechanics of discretionary fiscal policy within the Keynesian framework.
Summarize your findings using at least 250 words and provide a minimum of one reference. Use current APA formatting to document your sources.
Post & Respond
Post your findings by the third day of the module week. Return by the sixth day of the module week to review your classmates’ posts. Respond to at least two of your peers. Your response should be at least one paragraph, two to three sentences in length, and include the following.
- Whether you agree or disagree with the findings and why
- A probing question that facilitates further discussion of the topic
Review the Discussion Rubric for detailed grading instructions.