Y6

Key Words: GDP Gap (Actual - potential), fiscal policy, CARES Act, American Rescue Plan, automatic/discretionary fiscal policy, government expenditure/tax multiplier, fiscal stimulus, fiscal deficit, crowding out. We know that the COVID-19 virus had greatly affected economic activity in the United States. Find two articles that describe the CARES Act of 2020 and the American Rescue Plan of 2021 passed by the U.S Congress in response to the Covid crisis and its aftermath. Read the articles (or watch the videos). Your Task: You are writing to a person who knows very little of the economic concepts discussed in these articles/videos. For this person, use the content of the two articles/videos to summarize the CARES Act and the American Rescue Plan. In your summary, describe what was included in these fiscal packages and explain to the person how the actions by US Congress might have helped Actual GDP to move back towards Potential GDP. Focus on some of the key concepts (see key words in red above), Include in your discussion the definition of the key concepts