U.S. Congress Gives Final Approval to $787 Billion Stimulus Feb. 13 (Bloomberg)-The U.S. Congress gave final approval to President Obama's S787 billion economic stimulus package in hopes of wresting the economy out of recession. Democrats predict the plan would save or create 3.5 million jobs.... The stimulus plan would provide a half-trillion dollars for jobless benefits, renewable energy projects, highway construction, food stamps, broadband, Pell college tuition grants, high-speed rail projects, and scores of other programs. The plan would pump $185 billion into the economy this year and $399 billion next year, the agency said. -Brian Faler Source: Bloomberg.com, February 13, 2009. If consumers had an MPC of 0.90, by how much would AD have eventually increased with Obama's first-year spending stimulus, assuming the stimulus was entirely government spending? billion

U.S. Congress Gives Final Approval to $787 Billion Stimulus Feb. 13 (Bloomberg)-The U.S. Congress gave final approval to President Obama's S787 billion economic stimulus package in hopes of wresting the economy out of recession. Democrats predict the plan would save or create 3.5 million jobs.... The stimulus plan would provide a half-trillion dollars for jobless benefits, renewable energy projects, highway construction, food stamps, broadband, Pell college tuition grants, high-speed rail projects, and scores of other programs. The plan would pump $185 billion into the economy this year and $399 billion next year, the agency said. -Brian Faler Source: Bloomberg.com, February 13, 2009. If consumers had an MPC of 0.90, by how much would AD have eventually increased with Obama's first-year spending stimulus, assuming the stimulus was entirely government spending? billion

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter12: Fiscal Policy, Incentives, And Secondary Effects

Section: Chapter Questions

Problem 1CQ

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Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?
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Please no written by hand solutions Read Eye on the Multiplier in the eText or click on the icon to open a copy. Then answer the following questions During the second quarter of 2009, the economy was in recession and the output gap was $0 8 trillion How much fiscal stimulus would be required to close the output gap if the multiplier was as large as the President's Council of Economic Advisors believes? How much fiscal stimulus would be required if the multiplier was as large as Robert Barro believes? The President's Council of Economic Advisors says the fiscal policy multiplier is, so to close an output gap of $0.8 trillion, fiscal stimulus of $ trillion is needed Robert Barro says the fiscal policy multiplier is 0. so to close an output gap of $0 8 trillion, fiscal stimulus of $ trillion is needed.