Assignment: GDP and Govt Intervention

Purpose of Assignment

The theory of market economies emphasizes freedom of choice and limited government intervention. The classic argument for government intervention is market failure - the inability of the market economy to correct itself from a dysfunctional state (such as the Great Depression). Students will examine articles from the University library to analyze real-world examples of U.S. government intervention programs and apply current week readings to make intelligent conclusions about the economic policies.

Assignment Steps

Examples of intervention programs you may select, but are not limited to:

• US agriculture support programs

• Low income support programs (Food Stamps, Earned Income Tax Credit, Child Tax Credit, and Temporary Assistance to Needy Families)

• Medicaid, Children's Health Insurance Program, The Affordable Care Act (Obamacare)

• Low-income rent controls and housing vouchers

• Government promotion of renewable energy sources to discourage use of fossil fuels such as coal and oil

• Unemployment Insurance

• Bailout of U.S. banks and other financial institutions during the Great Recession

• Bailout of U.S. auto makers during the Great Recession

• Social Security retirement benefits

Develop a minimum 11-15 slide Microsoft PowerPoint presentation including detailed speaker notes.

• Discuss overall economy in the last 10 years: Retrieve statistics on Real Gross Domestic Product (GDP) and on Real Personal Consumption Expenditures (PCE) by year for the last ten years. You can retrieve those statistics from internet sources including, but not limited to, the Federal Reserve of St. Louis's FRED web site, the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) web site, or another credible source of your choice. Post these statistics in a single worksheet of an Excel workbook and submit your Excel file with your report. In your presentation, discuss the latest 10-year trends in both GDP and PCE. Also discuss how the trends in GDP compare with trends in PCE. You MUST include graphs of these statistics in your presentation; you could create the graphs in Excel and copy them into your report.

• Describe the government intervention and detail its history.

• Analyze the arguments for government intervention as opposed to arguments for market-based solutions. Hint: See the information in our course textbook on market failures.

• Examine who may be helped and who may be hurt by the selected government intervention.

• Given the analysis above, how much should government intervene? I am NOT looking for your opinion. I am looking for your opinion based on your analysis (your arguments MUST be supported by your analysis). No support, no credit.

• Examine externalities and/or unintended consequences of such intervention.

• Determine the cost trend of the intervention program since its implementation including whether costs are increasing, decreasing, or vary with the state of the economy.

• Evaluate the success or failure of the intervention in achieving its objectives and develop conclusions.

• Recommend whether the program should be continued as is, discontinued, or modified and defend your recommendation.

Note: The use of tables and/or charts to display economic data over the time period discussed is highly encouraged. However, if your source includes the copyright symbol, which looks like this:, then you should not copy any table and/or charts from that source. You could use, but are not required to use, charts/graphs retrieved from the Federal Reserve Bank of St. Louis FRED web site as long as the data sources used by FRED to create those charts are government sources such as the Bureau of Economic Analysis or the Bureau of Labor Statistics.

Cite a minimum of three scholarly, peer-reviewed references. The textbook is always a required reference and must be cited where used in the presentation.