ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 5.13P
To determine
The costs and benefits of the Recovery Act of the Obama Government
Concept Introduction:
Recovery Act, 2009- The American Recovery and Reinvestment Act (ARRA), 2009 was the economic stimulus package approximating a cost of $831 billion passed by the then President of US, Barack Obama in response to the Great Depression. The prime objective of the fiscal initiative was imparting job security in the US, the secondary but equally important objectives were an investment in economic and social infrastructure and relief to those most affected by the recession in the country.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Using the aggregate demand and supply model show how a government can manage aggregate demand. Faced with the possibility of recession explain how fiscal may be used to rectify the position.
Supply-side fiscal policy targets which of the following?
A) Long-run Aggregate Supply
B) Short-run Aggregate Demand
C) Short-run Aggregate Supply
D) Long-run Aggregate Demand
Using the aggregate demand and supply model show how a government can manage aggregate demand.
Knowledge Booster
Similar questions
- https://www.usatoday.com/in-depth/news/2021/03/10/covid-19-stimulus-bill-joe-bidens-plan-explained-6-graphics/4601454001/ So we just had one of biggest (if not THE biggest) actions of Fiscal Policy. Now using the Agg Model, you will explain what is happening now... First, prepare a graphic representation off the economy before the Biden Covid Bill. In the space below, insert the names for X and Y axis, graph LRAS and SRAS and AD line, and identify/label equilibrium. Be sure to identity whether the economy is at equilibrium, in expansion or in recession.arrow_forwardWhat were the monetary and fiscal policy responses to the Great Recession? Discuss their effectiveness and how the policy contributed to GDP growth.arrow_forwardfrom the news article (https://foreignpolicy.com/2020/09/16/coronavirus-covid-economic-impact-recession-south-korea-success/) Q1. South Korea announced stimulus package early on, in April. Use Aggregate demand and Supply diagram to show how the stimulus package must have worked? Q2. What is multiplier? How does it work? Do you think it worked in South Korean Case?arrow_forward
- Use an aggregate demand and aggregate supply graph to illustrate the situation where equilibrium initially occurs with real GDP equal to potential GDP and then the aggregate demand curve shifts to the right. What actions can Congress and the President take to move real GDP back to potential GDP. Explain. Show the results of these actions on your graph. Assume that the LRAS does not shift.arrow_forwardList pros and cons of government spending. Can government spending be shown on the IS model or the aggregate demand model?arrow_forwardFor each of the following fiscal policy proposals, determine whether the primary focus is on aggregate demand or aggregate supply or both: i. $1,000 per person tax reduction ii. a 5% reduction in all tax rates iii. Pell Grants, which are government subsidies for college education iv. government-sponsored prizes for new scientific discoveries v. an increase in unemployment compensation (i) both; (ii) supply-side; (iii) supply-side; (iv) both; (v) demand-side (i) demand-side; (ii) both; (iii) supply-side; (iv) supply-side; (v) both (i) demand-side; (ii) both; (iii) both; (iv) supply-side; (v) demand-side (i) supply-side; (ii) demand-side; (iii) demand-side; (iv) both; (v) both (i) supply-side; (ii) supply-side; (iii) demand-side; (iv) both; (v) botharrow_forward
- Economists at which of the following government offices help formulate spending plans and regulatory policies? Office of Management and Budget Congressional Budget Office Department of the Treasury The Federal Reservearrow_forwardExplain why increased government spending of, for example, $15 billion, will have a different impact on aggregate demand than a $15 billion tax cut.arrow_forwardThe task I am struggling with: In each of the following cases, either a recessionary or an inflationary gap exists. Assume that the aggregate supply curve is horizontal, so that the change in real GDP arising from a shift of the aggregate demand curve equals the size of the shift of the curve. Calculate both the change in government purchases of goods and services and the change in government transfers necessary to close the gap. a) Real GDP equals $100 billion, potential output equals $160 billion, and the marginal propensity to consume is 0.75. b) Real GDP equals $250 billion, potential output equals $200 billion, and the marginal propensity to consume is 0.5. c) Real GDP equals $180 billion, potential output equals $100 billion, and the marginal propensity to consume is 0.8 Thank you very much for your help.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
