A plan by the Taiwanese government (KMT) to distribute consumption vouchers to citizens of Taiwan in a bid to stimulate the local economy drew the…

1.A plan by the Taiwanese government (KMT) to distribute consumption vouchers to citizens of Taiwan in a bid to stimulate the local economy drew the opposition from Democratic Progressive Party. Premier Liu announced that the government will distribute NT$82 billion (US$2.52 billion) in consumption vouchers to citizens of the country. Liu said each Taiwanese citizen, regardless of income level, will be entitled to NT$3,600 (US$108) in vouchers to purchase goods at local retail outlets. The vouchers are to be issued before the beginning of the Lunar New Year holiday on Jan. 25, 2009. DPP legislator Tsai said the DPP is disappointed with the policy. DPP alternatively proposed to offer tax refunds and financial aid to low-income citizens. DPP argued that its proposal is the only “wonder drug” to rescue the country’s slumping economy. Moreover, DPP argued that KMT government has already raised the national debt to NT$ 3 trillion to promote its twelve national construction projects. The consumption voucher policy will further increase the burden of national debt which will be borne by future generations. (A)Taiwan’s economy was in a serious recession caused by the American subprime mortgage crisis in the end of 2008. Why was Taiwan affected by this foreign crisis?(B)Why did Taiwanese government use the consumption voucher policy as well as speeding up national construction projects in the face of economic recession at that time?(C)Why did DPP argue that its proposal is the only “wonder drug” to rescue the country’s slumping economy?(D)If you were the Taiwanese government, what policy would you use to solve the economic recession problem caused by subprime mortgage crisis at that time?In addition to descriptive analysis, graphical analysis is required.

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