a. Explain the potential demand-side effects ofextending unemployment benefits and notincreasing the Social Security payroll tax. b.

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a. Explain the potential demand-side effects ofextending unemployment benefits and notincreasing the Social Security payroll tax.

b. Explain the potential supply-side effects ofthe fiscal policy actions in part (a).

c. Draw a graph to illustrate the combined demand-side and supply-side effect of the fiscalpolicy actions in part (a).

When Congress passed a Job Creation Act following the 2008–2009 recession, it increased the level of unemployment benefits and lowered the Social Security payroll tax by 2 percentage points. These temporary measures expired after three years.

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Macroeconomics

ISBN: 9780137470822

14th Edition

Authors: Michael Parkin

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Question Posted: Apr 07, 2024 06:51 AM

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a. Explain the potential demand-side effects ofextending unemployment benefits and notincreasing the Social Security payroll tax. b.

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a Compared to the situation of allowing these policies to expire extending unemployment benefits wil...View the full answer

Macroeconomics

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