A) Briefly discuss the specific characteristics and evaluate the potential

positive and negative effects of the fiscal policies adopted by the US American

Government to tackle the recession induced by the Coronavirus pandemic in

2020. [18 marks]

B) Explain and illustrate the theoretical impact of these fiscal policies using

the Keynesian Cross diagram. Explain the multiplier effect and shown it in

your diagram. [25 marks]

C) Explain how the accelerator effect and time lag arguments apply to the US

American fiscal policy measures. [12 marks]

D) A major pandemic forces the government to lockdown the population and

reduce production in large sections of the economy for several months.

Explain how this might impact the economy. Show (draw) the impact of this

scenario using the Classical 4x4 diagrams and the Classical aggregate supply

and demand diagram. Explain the changes (shifting elements) as well as

causes and effects in the diagrams. [45 marks]

Read the following text adapted from an FT article on President Biden's US American fiscal policy to address the recession caused by the Coronavirus pandemic. Joe Biden signs $1.9tn stimulus bill into law - Move paves the way for US Treasury to send $1,400 cheques to most Americans James Politi in Washington MARCH 11 2021 US president Joe Biden has signed a $1.9tn stimulus package into law, enacting his top legislative goal for his first months in office to deliver a fiscal jolt to the American economy. Biden signed the legislation on Thursday afternoon in the Oval Office, a day earlier than previously announced. The president's signature, a day after the House of Representatives voted to pass the final version of the legislation in Congress, will allow the US administration to rapidly implement the stimulus over the Page 4 of 8 End jule Code: LUBS1951 coming weeks. It also set the stage for a White House effort to tout the benefits of the plan across the country, with Biden already scheduling a visit to Atlanta, Georgia, next week to discuss its impact. The legislation includes $1,400 direct payments to Americans earning $75,000 a year or less, which will have to be quickly disbursed by the US Treasury department. The cheques could result in a big increase in consumer spending as early as April. Biden''s green light also allows states to begin processing the extension of federal emergency unemployment benefits, worth $300 a week, until early September. Without the stimulus package, the aid was due to expire on March 14. As he signed the stimulus bill, Biden cited polls showing strong support for the legislation among the US public. \"Their voices were heard. | believe this historic legislation is about rebuilding the backbone of this country and giving people in this nation working people, middle-class folks, people who built the country a fighting chance. That's what the essence of it is,\" he said. At a virtual event with business owners after the bill signing, Kamala Harris, vice-president, said that \"the vast majority of Americans regardless of who they voted for in the last election support the American Rescue Plan\". She added: \"It will lift half of American children living in poverty, out of poverty.\" White House officials and Democratic lawmakers have touted the stimulus bill as a chance to reboot the US economic recovery and shield vulnerable households from the worst effects of the coronavirus pandemic. The plan did not receive any Republican support, however, as conservative lawmakers attacked it as a vehicle for excessive and unnecessary spending. [...]