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.
What will be an ideal response?
Facts supporting the proposition that President Obama’s $787 billion fiscal stimulus package worked include the following: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 and 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 the following arguments: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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Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes. The figure above illustrates his production possibilities frontier. What is Gabriel's opportunity cost of growing another ton of potatoes?
A) 0 cows B) 1 ton of potatoes C) 80 cows D) 400 cows E) 100 cows
If the current account balance shows a surplus, and the capital account also shows a surplus, then the official reserve transactions balance
A) must be positive. B) must be negative. C) must be zero. D) can either be positive, negative, or zero.