The month of April is Financial Literacy Month! — Explore Free Resources & Event

Grade 9-12
,
Lesson

Covid-19 Fiscal Responses Around the World

Time: 60 mins,
Updated: March 11 2021,
Author: Chris Cannon

Objective

Students will be able to:

  • Identify fiscal policy responses to the Covid-19 pandemic.
  • Rank fiscal policy goals.
  • Compare Covid-19 fiscal policy responses of the U.S. to other countries.

Student rank, research and compare different fiscal policy responses used by various governments during the Covid-19 pandemic.

Procedure

Begin the lesson with a quick review of fiscal policy – asking a few students to give answers to the following questions:

  1. What is meant by fiscal policy? (The taxing and spending decisions of a government.)
  2. How can fiscal policy be used to affect an economy? (Raising or lowering of taxes has an impact on the spending ability of businesses and individuals. Government spending has a direct impact on GDP and has a multiplier effect on other components of GDP.)
  3. Why is government spending a powerful tool to use during a recession? (Assuming a government can borrow money or has saved money, they can spend without raising taxes – called deficit spending – and help a struggling economy by providing payments to individuals or businesses).
  4. What might be some examples of fiscal policy actions in a recession? (Answers will vary but would include paying individuals directly, providing unemployment insurance, excusing or forgiving federal loans, and suspending certain tax payments, among others.)
  5. What might be some goals of these actions? (Answers might include things like increasing GDP, reducing unemployment, preventing businesses from closing, achieving specific policy goals like disease prevention, among others.)

Distribute a copy of Activity 1: Fiscal Policy Action Ranking to each student. Tell them to read the directions and then rank the fiscal policy actions by placing a 1 next to the one they think would be most important for a government to take and a 10 next to the action they think it would be least important to take and completing the rest of the numbers in order of importance. Tell them that after their ranking they should write a short explanation as to the reasons for their rankings. Give students up to ten minutes to complete this task.

Ask various students to share and defend their rankings and reasons, or if time allows, tallying all students about their top and bottom items may provide some insights. (Answers or rankings will vary, potentially significantly. Stress to the students that while all the actions listed have value, there is usually not enough money allocated nor the political will to do them all, so tough decisions have to be made about what to prioritize. Explain that people will rank items differently because they might value certain goals differently than other people. The result of having different goals will be that actions will be ranked differently.)

Tell students the Covid-19 pandemic and subsequent shutdowns of vast portions of the global economy put many governments around the world in the position of having to decide how much money to spend to support their economies. Much like the students had different priorities and goals, so did the different governments. Tell students they are now going to learn about what the U.S. did as a fiscal response as well as some other countries around the world.

Distribute a copy of Activity 2: Covid Fiscal Response Comparisons to each student.

Tell students to get their internet-enabled devices and navigate to this link or simply have students Google search “IMF policy responses to Covid-19” and it will be the first link. Instruct students to navigate to the United States response by clicking “U” in the alphabet under where it says “Browse by Country.” They will need to scroll past several countries to get to the U.S. [Note: This lesson was written in January of 2021. Policies will change as time passes or the website may be drastically changed. If you wish to frame these comparisons as of January 2021, direct the students to this link. Tell the students you want them to understand the differences between the countries in the middle of the height of the pandemic.]

Tell students to read carefully and answer the questions on the LEFT side of Activity 2. Explain that all the answers can be found in the Background, Reopening the Economy, or Fiscal section. Students do not need to go beyond these sections. Use your discretion to determine whether students complete this on their own or with a partner or small group. Depending on the level of your class, you may wish to do the United States side with them as an example.

Once students have finished answering the left side, review the questions by having several students give their answers. Use the Activity 2 Answer Key to help you facilitate the discussion. NOTE: As policies change and become updated, the answers to some of these questions may change. Be sure to check the site yourself to get the most up-to-date information.

Once you are satisfied the students understand the U.S. response, tell them they will now learn about the response in one other country. Number the students or groups off in fives. Their number corresponds to the following country: 1 – Germany, 2 – Japan, 3 – Brazil, 4 – South Africa, 5 – Saudi Arabia. You may choose other countries if you wish or let students choose a country. This lesson’s key provides some discussion points for the specific countries listed.

Using the right side of Activity 2 students should answer the questions with the country they were assigned. Monitor the class and answer any questions as necessary.

Once the majority of the class has answered their questions, tell the students to group themselves so they have at least one person from each country of the five in their group (if possible). (If students have worked in pairs or small groups, the pairs and small groups should break up to join the new groups with one student representing a country.) Depending on the number of students in the class, some groups may only have 3 or 4 students. If this lesson is being done virtually, redoing groups might be time consuming. Alternatively, just ask some of the students representing a country to give their answers to the class.

In their group, students should compare answers and discuss their findings. Encourage them to talk about anything they found surprising, similarities and differences with the Unites States, etc. Actively walk around and monitor the discussions and interject questions as necessary. Specifically, have students talk about what questions they still have after their research. The Activity 2 Answer Key will give you some talking points based on the information that was available as of January, 2020.

Conclusion
Reconvene the class as a whole and have the class look back at their answers from Activity 1. Ask and discuss the following questions:

  1. Does anyone think they might change their priorities after their discussions or did the activity re-affirmed their priorities? (Answers will vary but ask students to give specific reasons for their answers.)
  2. In general, which priorities or goals did the researched countries prefer? (Answers will vary, but the answer key can help facilitate this discussion).
  3. Is there a country that students feel made “better” decisions than others? (Answers will most certainly vary. Point out that much of the variance has to do which goals the students preferred.)

Complete the lesson by reminding students of the purpose of expansionary fiscal policy (to stimulate/support economies when they are in recessions) and that expansionary fiscal policy can take many forms around the world, and depend on the goals and priorities of the governments

Assessment

Assessing a lesson like this depends somewhat on which angle of the lesson you wish to emphasize. Here are a few suggestions:

  1. If you are more interested that the students know the types of policies used in response to the pandemic, have them create a T-chart that has “Increases in spending” on one side and “Decreases in taxes” on the other and, using their information from Activity 2, organize the policies they found accordingly.
  2. If you are more interested that the students relate the information they learned to the broader goals of fiscal policy, have the students take each of the reasons they gave on Activity 1 and explain for each goal whether the U.S. or another country they learned about was better at achieving that goal.
  3. You may simply wish to take up the handouts as an assessment, especially if you have decided to have the students find answers to questions they create.