Government Intervention Analysis

Exam Content

Analyze 1 (only one) of the following government intervention programs:

Countercyclical fiscal policies (countering economic disruptions such as the housing bubble and the Great Recession)

US agriculture support programs

Housing vouchers

Earned Income Tax Credit (EITC), including Child Tax Credit

Supplemental Nutrition Assistance Program (SNAP)

Health care resources for people with lower incomes

Medicaid, including Children’s Health Insurance Program (CHIP)

Affordable Care Act expansion

Old-Age, Survivors, and Disability Insurance (OASDI)

Medicare

Unemployment insurance

Write a summary of your analysis. Identify the intervention and the market failure leading up to the intervention. Complete the following in your paper:

Analyze the arguments for government intervention as opposed to arguments for market-based solutions. Hint: See the information about market failures.

Examine who has been helped and who has been hurt by the selected government intervention.

Examine externalities and unintended consequences of such intervention. For example, consider whether the SNAP program and health coverage for families with lower incomes result in higher future tax revenues because children from families with lower incomes grow up healthier and produce higher incomes over their lifetimes.

Analyze whether cost of the intervention you selected as a share of GDP or the number of participants is increasing, decreasing, or varies with the state of the economy, based on the cost trend(or number of participants) since its inception or since 2000.

Analyze credible economists’ opinions on the success or failure of the intervention that you chose in achieving its objectives.

Recommend whether the program should be continued as is, discontinued, or modified based on your conclusions. Defend your recommendation.

Rubric Details
Maximum Score
120 points
1. Analyze the arguments for government intervention as opposed to arguments for market-based
solutions.
15% of total grade
2. Examine who has been helped and who has been hurt by the selected government intervention.
15% of total grade
3. Examine externalities and unintended consequences of such intervention.
15% of total grade
4. Analyze whether cost of the intervention selected as a share of GDP or the number of participants is
increasing, decreasing, or varies with the state of the economy, based on the cost trend (or number of
participants) since its inception or since 2000.
15% of total grade
5. Analyze credible economists’ opinions on the success or failure of the intervention chosen in achieving
its objectives.
15% of total grade
6. Recommend whether the program should be continued as is, discontinued, or modified and based on
your conclusions. Defend your recommendation.
15% of total grade
7. Syntax & Semantics: Word choice, sentence structure, grammar (e.g., subject-verb agreement,
pronoun-antecedent agreement), sentence boundaries (run-on or fused sentences, sentence fragments)
3% of total grade
8. Mechanics: Spelling, capitalization, hyphens (connecting words), numbers, abbreviations
2% of total grade
9. Information Literacy
5% of total grade

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