Question

35.Read Eye on Fiscal Stimulus.

How big was the fiscal stimulus package of​ 2008-2009, how many jobs was it expected to​ create, and how large was the multiplier implied by that​ expectation?

Did the stimulus​ work?

The fiscal stimulus package of 2008–2009 was​ _______.

  

A.

​$65 billion

B.

​$787 billion

C.

​$65 million

D.

​$100 billion

E.

​$787 million

The fiscal stimulus package of 2008–2009 was expected to create​ _______ jobs.

The multiplier implied by that expectation is​ _______.

  

A.

​65,000; 1.6

B.

​650,000; 0.4

C.

​65,000; 0.4

D.

​787,000; .5

E.

​650,000; 1.6

The stimulus​ _______ the expectations of the Obama administration because​ _______.

A.

​met; 650,000 jobs were created by using a combination of discretionary and automatic fiscal policy

B.

did not​ meet; Congress failed to spend all of the fiscal stimulus

C.

did not​ meet; the multiplier was much smaller than 1.6

D.

​met; the multiplier was much smaller than 1.6

Answer 1

The fiscal stimulus package was $787 billion as the government wanted to increase public spending so as to avert further economic recession.

The fiscal stimulus package was expected to create roughly 650,000 jobs. The multiplier is the ratio of change in national income to the change in government spending and the implied multiplier was 1.6

The stimulus infact generated more than 6,50,000 jobs by using combination of automatic and discretionary fiscal policy and many more jobs entailing approximately 2 million were generated.