A 2009 article in The Economist noted that
A)recent research has allowed economists to estimate the values of fiscal multipliers with a great deal of precision.
B)research on multipliers indicates that multipliers for permanent tax cuts tend to be smaller than multipliers for temporary tax cuts.
C)most of the evidence on multipliers for government spending is based on changes in military expenditures.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The article specifically states that "most of the empirical work on multipliers has focused on spending changes, often associated with changes in military expenditures." Therefore, option C is the only correct statement. Option A is incorrect because the article actually notes that estimates of fiscal multipliers have varied significantly across studies. Option B is incorrect because the article actually suggests that the evidence on multipliers for tax cuts is less clear-cut than for spending changes, and that the size of multipliers depends on a range of factors.

A 2009 Article in the Economist Noted That