Is The Trump Administration Could Test Whether Deficits Help The Economy?

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a. The article “The Trump Administration Could Test Whether Deficits Help the Economy” written by Neil Irwin for The New York Times was published in an attempt to explain the new presidents proposed economic plan for the nation.
b. Even though Trump did not go into extreme detail on his economic plans as president, he made it clear that he would be introducing new fiscal policies.
c. In particular, Trump plans on utilizing expansionary fiscal policy by cutting taxes and increasing government spending.
d. Irwin worries this policy will result in a larger budget deficit for the country.
e. This policy may bring about some needed inflation.
f. The main worry many economists seem to have about Trump’s policies is that the economic growth it brings about will not offset the budget deficit it creates.
g. The purpose of this paper is to explain inflation and fiscal policy because they helped me understand the article.
II The first economic concept I will discuss is inflation.
a. Inflation is a naturally occurring part of the economic cycle.
b. Inflation is when the average price level rises in an economy.
c. Graphically it occurs when either the aggregate demand or short-run aggregate supply curve shifts to the left.
d. It is measured by various price indices.
e. Unanticipated inflation is harmful to the economy, but anticipated inflation the population is prepared for is healthy.
f. There are problems associated with inflation, though.
i. When the price level increases,…

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