As Discussed in the Case in Point on the Size

question 115

Multiple Choice

As discussed in the Case in Point on the size of the fiscal multiplier, a study conducted by Jonathan Parker on the effect of fiscal policy during recessions suggests that

• A) the multiplier effect of fiscal policy is much less than that for monetary policy.
• B) temporary fiscal policy financed through government borrowing implies a multiplier value between 0.8 and 1.5.
• C) fiscal policy has little effect on the economy and that the multiplier value is effectively zero.
• D) statistical models are inadequate to determine the multiplier and the multiplier value likely varies based on the state of the economy.

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Definitions:

Infinite Recursion

A condition where a function calls itself indefinitely without a breaking condition, leading to a stack overflow error.

Abnormal Termination

The unexpected interruption of a program's execution due to errors like runtime exceptions, resulting in the program ending abruptly.

Base Case

In recursion, the condition under which the recursive process ends, preventing infinite recursion.

Recursive Solution

A recursive solution involves solving a problem by breaking it into smaller instances of the same problem, typically involving a function calling itself.