Economics of Pandemics ECON 3201 A ASSIGNMENT 4 Question 1: 35 points Distinguishing between automatic stabilizers and discretionary fiscal policy, discuss their relative advantages and disdavantages in the context of the pandemic

Economics of Pandemics

ECON 3201 A

ASSIGNMENT 4

Question 1: 35 points

Distinguishing between automatic stabilizers and discretionary fiscal policy, discuss their relative advantages and disdavantages in the context of the pandemic. Suppose you are working at the Department of Finance and are tasked with the job of designing a discretionary fiscal policy. What considerations would you take into account? Explain briefly.

Question 2: 35 points

While Universal Basic Income (UBI) has been discussed since the 1960s, it has received renewed attention in Canada during the ongoing pandemic. Present the case for and against UBI. Explain the notion of negative income effect on labour supply. Does the evidence from the studies discussed in the lectures concur with this concept? Explain succinctly in the context of UBI.

Question 3: 30 points Are the following statements ‘True’, ‘False’ or ‘Uncertain’ (sometimes true, sometimes false)? Points are for only for the quality of your reasoning/explanation and not for merely stating True, False, or Uncertain.

1. There is strong support for UBI among Canadians.
2. Canadians are willing to pay more taxes to support UBI.
3. Based on the key indicators of the COVID-19 data, it appears that Ontario is headed for a lockdown—the grey area in the new colour coded COVID risk assessment system—by early December 2020.