Did President Obama's $787 billion fiscal stimulus package of early 2009 work? Name several facts in support of the proposition that it did. Also, list the arguments of the skeptics
Facts supporting the proposition that President Obama's $787 billion fiscal stimulus package worked include:
1 . Real GDP growth moved from the minus 7 percent range to the plus 3 percent range within a few quarters.
2 . Job losses, which were running over 700,000/month during January & February 2009, started to diminish immediately. and positive job growth resumed in January 2010 .
3 . Some of the sectors specifically targeted by the stimulus and related policies - such as state and local government spending, automobiles, and housing - showed notable improvements.
Skeptics maintain that:
a . Employment continued to fall throughout 2009 even though the stimulus bill was passed in February.
b. The economy did considerably worse than the Obama administration had forecast when it asked for the stimulus bill.
c. The economy has a natural self-correcting mechanism, so eventually, the recession would have ended.
d. Monetary policy was more responsible for the recovery than fiscal policy was.
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Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses?
A) The supply increases so that the supply curve shifts rightward. B) The supply decreases so that the supply curve shifts leftward. C) The quantity supplied increases, but there is no shift in the supply curve. D) The quantity supplied decreases, but there is no shift in the supply curve. E) The quantity supplied decreases, and the supply curve shifts leftward.
The real opportunity cost of producing product X is the amounts of products Y, Z, and so forth, that might have been produced if resources had not been used to produce X.
Answer the following statement true (T) or false (F)
Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behavior from miser to spender might actually be detrimental to the economy because
A) saving has to be greater than consumption for the economy to grow. B) Scrooge was happiest when he was saving money, and happiness is the key to economic growth. C) Scrooge's miserly saving helped contribute to the production of investment goods rather than consumption goods. D) Scrooge's consumption habits were more detrimental to the environment than were his earlier saving habits.
Suppose the cross-price elasticity of demand between quinces and muskmelons is 5 . Which of the following must be true?
a. Quinces are normal goods. b. Muskmelons are normal goods. c. If the price of quinces rises by $5, the demand for muskmelons will increase by 1. d. If the price of muskmelons rises by $5, the demand for quinces will increase by 1. e. Quinces and muskmelons are substitutes.