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


Answer: B

Economics

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