As Discussed in the Case in Point on the Size

question 177

Multiple Choice

As discussed in the Case in Point on the size of the fiscal multiplier, a study conducted by John Taylor on the effect of fiscal policy since the year 2000 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:

Episodic Memory

A type of long-term memory that involves the recollection of specific events, situations, and experiences from one's personal past.

Chili Pepper

A fruit from the capsicum plant family, known for its hot and spicy flavor, caused by the chemical compound capsaicin.

Implicit Memory

Memories that we may not recall consciously, but that are still demonstrable through an indirect test.

Procedural Memory

A type of long-term memory that enables individuals to perform certain tasks without conscious awareness of these previous experiences.