Covid-19 Fiscal Responses Around the World Activity 1: Fiscal Policy Actions Ranking Name: Date: Directions: The statements below refer to actions many governments enacted to help their countries during the Covid-19 pandemic using expansionary fiscal policy. Each action has an implicit goal behind it. Rank the statements below by placing a 1 next to the action you think is MOST important and a 10 next to the statement you think is LEAST important. Complete the list with numbers 2-9. After you complete your ranking, explain in a short paragraph the reasons or goals that lead you to rank the items as you did. ! Increasing or extending unemployment benefits __________ ! Making direct payments to individuals (even if they have a job) __________ ! Forgiving some government loans (business, student, etc.) __________ ! Making direct payments to businesses __________ ! Making loans to businesses that must be repaid with interest __________ ! Increasing funding to research vaccines/treatments for Covid-19 __________ ! Increasing funding to pay for medical equipment __________ ! Allocating money for Covid-19 testing __________ ! Increasing funding for federal food programs (including schools) __________ ! Providing foreign aid to help other countries __________ Explanation: UNITED STATES 1.Identify 3 speci c scal policy responses the U.S. government took during the pandemic (include dollar amounts or % of GDP if available). • The Paycheck Protections Program.The legislation includes (i) US $ 321 billion for additional forgivable Small Business Administration loans and guarantees to help small businesses that retain workers; (ii) US $ 62 billion for the Small Business Administration to provide grants and loans to assist small businesses • Health Care Enhancement Act; (iii) US $ 75 billion for hospitals; and (iv) US $ 25 billion for expanding virus testing. (US $ 483 billion Paycheck Protection Program and Health Care Enhancement Act) • Providing food safely in the Coronavirus Aid, Relief and Economy Security Act (“CARES Act”). US $ 25 billion to provide a food safety net for the most vulnerable 2. Overall, explain whether you feel the U.S. policies were targeted more towards businesses, individuals, or a balance of the two. I feel the U.S policies are relatively balanced helping businesses and individuals . But I do notice there is more money going towards programs focusing on the individuals. 3.Based on the scal policy action you ranked as #1 on the previous activity, do you see evidence that the U.S. also thought this was important? Explain On the previous activity I ranked “Increasing funding to pay for medical equipment” as my number one policy. I do see that the scal policy I have chosen is also thought of as important in the United States. For example we can see this through the Health Care Enhancement act, giving $75 billion dollars to hospitals. 4. Assume you had to remove one of the policies you see listed on the site. Which speci c policy would you remove and why? If I were to remove one of the policies listed in the site it would have to be “Increasing or extending unemployment bene ts” because I feel like the more bene ts the unemployed receive the less people want to go back to work. There is a risk that the unemployment rate will rise due to the increased bene ts. 5. What is one question you still have about the U.S. scal response? Is there a way to adjust the policies to achieve maximum productivity for the U.S? Response There were many monetary policies responses the Federal Reserve took during the Covid 19 pandemic. The Federal reserve introduced these to support the flow of credit in our country. The first one I choose is the Money Market Mutual Fund Liquidity Facility (MMLF), this was made to be able to provide loans to the depositary institutions which provide the safety of our services and liquidity.This enables the institutions to purchase assets from the prime money market funds. Second monetary policy response is The paycheck protection program liquidity facility this provides liquidity to financial institutions that have originated loans under the small business administration payment protection program which is defined as PPP which keeps workers on the payroll. Lastly another policy that was made is the Main Street Lending Program which was made to expand loans and purchase new loans and this is targeted towards mid sized and small business to be able to provide help to them. I think the fiscal and monetary policy responses that the federal reserve took during the COVID 19 pandemic were fairly adequate for the pandemic. The policies are both focusing on our businesses and helping small and big businesses stay open and in production, as well as individuals. The policies has helped the unemployed and have given out money distributions to give relief to the citizens of the United States. References Policy responses to covid19. IMF. (n.d.). Retrieved November 11, 2021, from https://www.imf.org/en/Topics/imfand-covid19/Policy-Responses-to-COVID-19#U.
