Reference no: EM133246034

In the face of the Covid-19 pandemic, former President Trump signed the bipartisan "Coronavirus stimulus relief bill" to assist tens of millions of households affected by this pandemic. In addition to other measures, the plan included direct payments of $1,200 directly to each adult who earns less than $75,000 per year or $150,000 per couple, plus $500 for each child; loans to companies so that they continue to pay their workers' wages; expansion of the coverage of the payment of unemployment pensions to workers furloughed due to the corona virus, including part-time and self-employed workers; changes in student loan payments; different accounting rules for retirements; money for the health sector; extension of the term to make tax contributions until the month of June; among many other measures that imply a monetary injection or increase in the circulation of money in the economy of 2.2 billion dollars (an equivalent to 10% of US GDP!). Subsequently, the current President Biden signed an agreement that reinforced the previous law.

1. What are the Presidents, Congress, and the Fed trying to accomplish through these measures?

2. From an economic point of view, what could be expected as a result of these fiscal and monetary decisions?

3. What has apparently been achieved so far with the economic stimulus package? Why?

4. What are the risks of this kind of expansionary fiscal policy?