Ahead of the meeting, the G8 were split on how to manage the exit from the current downturn, the steepest since World War II, with the U.S. concerned that reversing the stimulus too quickly may hurt the recovery, and Germany fearing that pumping too much public money into the economy may unleash a strong inflation. The leaders pledged to coordinate in repairing the financial system, helping banks to rid their balance sheets of bad assets, while making sure that global competition remains fair.
1. Challenge students to develop a graphic image explaining why reversing the stimulus too quickly may hurt the economy, while injecting too much money into the economy may unleash a strong inflation.
2. Can students think of any ways in which stimulus packages and their potential negative consequences can be compared to rain? What do you think about this comparison?
3. Do students think its important for the leaders of the world to meet together to discuss the economy? Why or why not? Would such conversations have been as important one hundred years ago as they are today? Why or why not?
4. Do students see any signs of economic stimulus in their own communities? If so, what signs?