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

question 161

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 government purchases multiplier would be ________ the administration's estimate,and economists Lawrence Christiano,Martin Eichenbaum,and Sergio Rebelo argued that when short-term interest rates are near zero,the 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:

Voucher

A document authorizing a payment, or indicating an intention to make a payment, for goods or services received.

Cash Payments

Transactions that involve the immediate transfer of cash to settle debts or purchase goods or services.

Transaction

An exchange or transfer of goods, services, or funds between two or more parties.

Currency

Currency is a system of money in general use in a particular country, facilitating the exchange of goods and services.