Many economists think discretionary fiscal policy is of limited effectiveness in stabilizing the economy because:1) the multiplier effects associated with fiscal policy take a long time;2) changes in government spending and taxation are too small in relation to the size of the economy to have much effect;3) there are long and uncertain lags in implementing fiscal policy.A.1 only.B.2 only.C.3 only.D.1 and 2.E.1 and 3.F.2 and 3.

Discretionary fiscal policy is the policy of government that alters the spending of government or…

Answered: Many economists think discretionary…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A fiscal stimulus was initiated by President Obama in response to the economic downturn of 2008-2009. At that time, the president's economists estimated the multiplier to be a. 2.4 for government purchases and 1.4 for tax cuts. b. 3.2 for government purchases and 2.0 for tax cuts. c. 1.6 for government purchases and 0.4 for tax cuts. d. 1.6 for government purchases and 1.0 for tax cuts.
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According to economists, the process of optimal decision making by consumers typically yields total benefits well above the amount paid for the goods. These market-created benefits are referred to as ▼, and using the graph to the right, are represented by area Suppose now that the market price falls. According to the graph, the excess of total benefits over the total amount spent by consumers will ▼ decrease increase not change PM B Quantity (Q) Q

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