We are here with you hands in hands to facilitate your learning & don't appreciate the idea of copying or replicating solutions. Read More>>
+ Link For Assignments, GDBs & Online Quizzes Solution
+ Link For Past Papers, Solved MCQs, Short Notes & More
Dear Students! Share your Assignments / GDBs / Quizzes files as you receive in your LMS, So it can be discussed/solved timely. Add Discussion
How to Add New Discussion in Study Group ? Step By Step Guide Click Here.
When President Barack Obama took office in January 2009, the economy was suffering from a significant recession. Even before he was inaugurated, the president and his advisers proposed a substantial stimulus package to increase aggregate demand. As proposed, the package would cost the federal government about $800 billion, or about 5% of annual GDP. The package included some tax cuts and higher transfer payments, but much of it was made up of increases in government purchases of goods and services. Professional economists debated the merits of the plan. Supporters of the Obama plan argued that increased spending was better than reduced taxes because, according to standard Keynesian theory, the tax multiplier is smaller than the government spending multiplier. According to an analysis by Obama administration economists, the government spending multiplier was 1.57, whereas the tax multiplier was only 0.99 at that time. Thus, they argued that increased government spending on roads, schools, and other infrastructure was the better route to increase aggregate demand and create jobs.
Being student of macroeconomics, analyze the above case of American economy and recall the Keynesian theory of income and employment, discuss why the tax multiplier is smaller than the government spending multiplier in an economy in general.
Note: Be specific and precise. Write answer according to the requirement. Avoid irrelevant and extra details.
.+ http://bit.ly/vucodes (Link for Assignments, GDBs & Online Quizzes Solution)
+ http://bit.ly/papersvu (Link for Past Papers, Solved MCQs, Short Notes & More)+ Click Here to Search (Looking For something at vustudents.ning.com?) + Click Here To Join (Our facebook study Group)
Share your ideas please,as today is the last day for GDB closure.