READING WORKSHOP

THIRTY-SIX - ONE SHOULD MONETARY AND FISCAL POLICYMAKERS TRY TO STABILIZE

THE ECONOMY?

Macroeconomics Fundamentals Course

Julleth vannesa Duarte Sánchez

Mayra Alejandra Fuentes Hernández
Viviana Carolina Peña Tasco

The fundamental purpose of this activity is to contribute to the mastery of a second language. To do this, consider the
following reading provided, develop the following questions.

1. What is the main idea of reading item 36-1?

2. What are the main work items of reading 36-1?
3. What are the main concepts of reading, mention them
4. Identify the main verbs of the reading
5. Identify the main logical connectors between paragraphs. For example: By, Too often, As a result.
1. The main idea of the passage is to discuss a debate in economics about whether monetary and fiscal
policymakers should try to stabilize the economy. One perspective argues that they should use policy tools to
smooth out economic fluctuations to prevent recessions and unemployment. The opposing viewpoint suggests
that there are practical challenges and limitations to implementing such policies, and attempts to stabilize the
economy could potentially make things worse due to uncertainty and long policy lags. The passage outlines the
arguments for and against the idea of policymakers actively trying to stabilize the economy.

2. - Debate on Macroeconomic Policy: The passage introduces the debate on whether monetary and fiscal
policymakers should actively work to stabilize the economy.

- Pro-Stabilization Argument: It presents arguments in favor of policymakers attempting to stabilize the

economy. This includes the idea that recessions represent a waste of resources, and policymakers can use monetary
and fiscal policies to reduce the severity of economic fluctuations.

- Con-Stabilization Argument: The passage also presents arguments against active stabilization. This
perspective highlights practical challenges, such as policy lags and the uncertainty of economic forecasting. It
suggests that well-intentioned policies can sometimes exacerbate economic fluctuations.

- Reference to Historical Context: The passage references historical events, like the Great Depression, to
illustrate how destabilizing policy actions have been debated.

- Analogies: It uses analogies, like the medical concept of “first, do no harm,” to draw parallels to the debate
about stabilizing the economy.
3.
• Macroeconomic Policy: The central concept is the debate over the use of monetary and fiscal policies to
influence and stabilize the macroeconomy.
• Aggregate Demand and Supply: The passage mentions how changes in aggregate demand and aggregate supply
can lead to fluctuations in production and employment.
• Pro-Stabilization Argument: This concept highlights the idea that policymakers should intervene to smooth out
economic fluctuations and reduce the severity of recessions.
• Con-Stabilization Argument: This concept emphasizes the challenges and limitations associated with using
monetary and fiscal policies for stabilization, including policy lags and the uncertainty of economic forecasting.
• Economic Forecasting: The passage touches on the imprecision of economic forecasting and its role in
policymaking decisions.
• Historical References: The passage references historical events such as the Great Depression to illustrate points
in the debate.
• Analogy to Medical Practice: It draws an analogy between stabilizing the economy and medical care,
suggesting that intervention without reliable knowledge can be risky.

4.
• Developed
• Accumulated
• Influence
• Reduces
• Lay off
• Falling
• Represents.
• Learn
• Become
• Produce

5.
• Causality/Continuation
• Contrast/Transition
• Cause and Effect
• Contrast/Obstacle