Macroeconomic Stabilization Policy-Unit 9 Discussion

Topic 1: Macroeconomic Stabilization Policy

Stabilization policy is the use of government policy to reduce the severity of recessions and harness in excessively strong expansions. The government manages macroeconomic fluctuations (manage business cycles) in order to lessen the economic pain of recessions and tame inflation.

By coordinating monetary and fiscal policy, the Federal Reserve Bank Chairman, Ben Bernanke, and U.S. Treasury Secretary, Henry Paulson, responded to the financial crisis by intervening in financial markets in unprecedented ways in 2008.

Discussion Checklist:

A. Do you think this intervention was necessary?
B. What are the consequences of this intervention?
C. What might have happened if they had not intervened?

Topic 2: Debates on the U.S. Tax System

There is always debate regarding the structure of the current income tax system in the U.S. Many opponents of the current system argue that under its current structure, many wealthy households are able to avoid taxes and for most households, the tax system is simply too complicated and confusing. One solution that has been proposed is the “flat tax” system.

Discussion Checklist:

A. What are the benefits and detriments of replacing the current income tax system with a flat tax system?
B. Who benefits and who might be harmed by the introduction of a flat tax?
C. What implications does the flat tax system have for tax preparation companies such as H&R Block?


Topic 3

“Happy Accidents” in Science

  1. What examples of learning by “happy accident” have you experienced in your own life?

  2. What do you think it means for a person (especially a scientist) to have a “prepared mind,” as Pasteur describes?

  3. How can a person prepare his or her mind to be open to chance within any particular discipline? What roles might education, job experience, and life experience play in creating a prepared mind?

  4. What about science makes it particularly good at allowing people to analyze their accidents?

  5. What are some risks associated with research that involves chance? [Hint: Use your Reading this week and consider the risks associated with stem cell research, cloning, gene therapy, HIV.] Are there circumstances when research should not be conducted due to risks or are there ways to reduce risk?


Macroeconomic Stabilization Policy

Topic 1: question 1

The 2008 economic crisis can be described as the worst economic crisis to have hit the world and particularly the United States. It took months and months of planning in the attempt to save the United States economy as well as that of the whole universe given that most of the countries in the world depend on the American economy. The intervention by the government was equally important to save millions of jobs as well as preventing the total collapse of the real estate and mortgage sectors of the economy which provided millions of employment opportunities at the time.

Question 2

After it was clear that most of the companies that had invested in the mortgage industries were set to fall, the government introduced The Troubled Asset Relief Program (TARP) to save companies. However, this act of intervention had both positive and negative impact on the economy and the American people in general. Despite the fact that it helps to restore trust and faith in the real estate sector, the intervention also created the notion that the government was ready to help when called upon and this prompted the players in the market to be reckless (Willard, 2012).

Question 3

If the government had not intervened the situation, the Americans, and the international community would have lost faith in their economic policies and the real estate sector in particular. Moreover, the country would have continued to witness the loss of employment at a high rate.


Topic 2: question 1

Some of the benefits that the country is likely to enjoy from a flat tax system include the fact that it provides a cost benefit to taxpayers, it eliminates other taxes; it is simple to understand, and it promotes economic growth. On the other hand, it is hard to ignore challenges of this tax system that include the fact that it penalizes low-income earners; it benefits the rich as well as it eliminates the aspect of the IRS.

Question 2

The rich are likely to benefit from this tax system compared to the poor considering that both rich and poor have to pay the same percentage of the tax despite their differences in wealth and income. As a result, low-income earners are likely to suffer and harmed by the proposed new tax system.

Question 3

There is fear among most individuals regarding the debate of introducing flat tax considering most individuals view it as a job killer given the fact that most companies and organization that employ accountants to file their taxes will eventually lose their positions in these companies.

Topic 3: question 1

One of the happy accidents in my life is that uncoated copper wire was a good conductor of electricity when I tried inserting the uncoated wire into a socket.


Question 2

It means to prepare, physically, mentally and psychologically by putting all the necessities for the learning or experimentation to begin.

Question 3

The best way for an individual to prepare is by putting all the tools to work and the necessary tools for the learning in advance before the actual experiments. On the other hand, education and job experience gives an individual a whole new perspective regarding what he or she is about to perform.

Question 4

Given the fact that science is ever changing with new discoveries and innovations each and every day, it presents the best platform to test theories and hypothesis development (Crowley, 2013).

Question 5

All scientists have a responsibility to decide how far they are willing to go and the precautionary measures necessary to conduct their experiments, mainly because Madame Curie died from exposure of her own experiment.





Crowley, M. C. (2013). Not a happy accident: How Google deliberately designs workplace                      satisfaction. . Fast Company.

Willard, R. S. (2012). Impact of the 2008–2010 economic recession on local health departments.             . Journal of public health management and practice, 18(2), , 106-114.



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