In Preparing Their Estimates of the Stimulus Package's Effect on GDP,Obama

question 130

Multiple Choice

In preparing their estimates of the stimulus package's effect on GDP,Obama administration economists estimated a government purchases multiplier of 1.57.Economist Robert Barro argues that during wartime,the military expenditures multiplier would be ________ the administration's estimate of the government purchases multiplier,and economists Lawrence Christiano,Martin Eichenbaum,and Sergio Rebelo argued that when short-term interest rates are zero,the government purchases multiplier would be ________ the administration's estimate.

• A)higher than; lower than
• B)lower than; higher than
• C)higher than; equal to
• D)equal to; lower than

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Definitions:

Reservation Policy

A government policy that sets aside specific areas of land (reservations) for indigenous peoples, often with imposed restrictions on land use and sovereignty.

Backcountry Farmers

Agriculturalists living in rural, often remote areas of the country, historically known for their self-reliance and small-scale farming.

Subsistence Agriculture

Subsistence Agriculture is a type of farming in which the farmers focus on growing enough food to feed themselves and their families, with little to no surplus for trade.

Agricultural Diversification

The practice of growing a variety of crops or engaging in different agricultural activities to reduce risk and increase sustainability in farming.