Answer question.

1. An important concept to explain the Keynesian model is the ‘spending multiplier’ effect. According to Keynes, an initial spending creates income in the economy and this new income leads to more spending and more income. As a result of this chain reaction, aggregate spending will increase more than the initial spending. To understand this concept better, please read Humorist Art Buchwald’s famous Multiplier example in the materials and construct your own example to explain the multiplier process. Your starting point can be a change (an increase or a decrease) in consumption expenditure, investment expenditure, government expenditure, or a change in exports. Be creative and come up with a fun scenario as in the Multiplier example by Art Buchwald. How would a change in C, I, G or X affect the economy? Would the effect on the economy be more, equal to or less than the initial change in spending?


2. Research the fiscal policy implemented in the US during the Great Recession.

  • Explain the Economic Stimulus Act of 2008 and the American Recovery and Reinvestment Act of 2009.
  • Discuss if these programs are Keynesian or Classical.
  • Please include how increases in aggregate demand through government expenditures and tax cuts (through the multiplier effect) increase GDP in your answer.

Here are a few resources for you:

(feel free to use other credible sources and cite your references in your discussion post)

Bush Signs Stimulus Bill (ESA of 2008)

Obama’s Stimulus Package ARRA 2009

The US Economic Stimulus Plan 2009 (Links to an external site.)

3. Why do you think so many city governments and states seem to “bend over backwards” to get new businesses to locate in their local economies? Indeed, many cities, counties and states offer tax breaks (e.g. promises not to impose local property taxes for up to 15 years), and some provide land free to businesses who choose to locate in their areas. What concept introduced in this week help explain this behavior? Can you give an example from your local economy?

Here is an example from Amazon’s recent search for it’s second HQ and the response from the cities all around the US (Links to an external site.)

You can leave a response, or trackback from your own site.


10 Responses to “Answer question.”

  1. 230099 178319Hello I found the Totally free Simple Shopping Icons Download | Style, Tech and Internet post quite interesting therefore Ive included our track-back for it on my own webpage, continue the excellent job:) 360211

  2. 333437 612328Howdy! I just want to give an enormous thumbs up for the excellent info you may have here on this post. I will likely be coming back to your weblog for more soon. 560479

  3. 289271 949555Every email you send should have your signature with the link to your web web site or weblog. That generally brings in some visitors. 254733

  4. 토토 says:

    796304 383325I love the look of your site. I recently built mine and I was seeking for some style concepts and you gave me some. May I ask you whether you developed the site by youself? 459112

  5. 10582 88045A person essentially help to make seriously articles I would state. This really is the first time I frequented your internet site page and thus far? I surprised with the research you made to make this certain publish incredible. Great job! 870093

  6. 285873 730641Finally, got what I was looking for!! Ive really enjoying every small bit of this. Ecstatic I stumbled into this post! and also Ive bookmarked to look at unique details for your weblog post. 926950

  7. 3D printing says:

    733270 164364You ought to experience a contest personally with the finest blogs on-line. Im going to suggest this page! 338497

  8. 449532 665413Speedily and easily build your internet traffic and PR, which provides Web site visitors to add your page to any social bookmarking website. 895346

  9. benelli 828u says:

    948446 904015I used to be recommended this internet web site by my cousin. Im no longer sure whether this put up is written via him as nobody else know such exact approximately my dilemma. You are amazing! Thank you! 882194

  10. Home Value says:

    215660 423984Excellent blog here! Additionally your website a lot up fast! 282286

Leave a Reply

Powered by WordPress | Designed by: buy backlinks | Thanks to webdesign berlin, House Plans and voucher codes