How government spending multiplier can have less value

Assignment Help Microeconomics

Reference no: EM131806276

Question: Economists in the Obama administration estimated that the government stimulus package in 2016 has a multiplier value of 1.57, while other economists have estimated the multiplier to be only 0.61.

a. Briefly explain how the government spending multiplier can have a value less than 1.

b. Why does an estimate of the size of the multiplier matter in evaluating the effects of an expansionary fiscal policy?

c. Which types of government spending have high multiplier effects and which types have low multiplier effects?

Reference no: EM131806276

Questions Cloud

Define disadvantages of monopsony power in healthcare : In economics, it is generally agreed that monopolies are bad. However, the book argues that the healthcare system could be improved by purchasers.

What would be the amount related to the sale : What would be the amount(s) related to the sale that Morgan would report in its statement of cash flows for the year ended December 31, 2011

Identify one opportunity and one threat for the company : Identify one opportunity and one threat for the company. These are external, or "outside" factors not controlled by the company.

Demonstrate the critical link of strategic objectives : Demonstrate the critical link of strategic objectives to rewards by giving an example from either the organization where you work or one that you know

How government spending multiplier can have less value : Economists in the Obama administration estimated that the government stimulus package in 2016 has a multiplier value of 1.57, while other economists.

What are the adjusting journal entries : The new patent will protect the value of the old one only for a 4 year period. What are the adjusting journal entries

How should cash discounts that are received for the purchase : How should cash discounts that are received for the purchase of inventory be recognised? Which of the following are accounted for under IAS?

Discuss a major event in labor history : Identify a union that has gained membership in recent years--or one that has lost membership in recent years. Explain why you think this has happened

Calculate kibble company break-even sales in units : Kibble Company had the following functional income statement for the month of July 2011: Calculate Kibble Company's break-even sales in units

User Account

All Pages