Chapter 1. Chapter 37 (Chapter 18 Macro)

Step 1

Work It Out
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You must read each slide, and complete any questions on the slide, in sequence.

Question

According to recent estimates by Susan Woodward and Robert Hall, an extra dollar of government purchases raises GDP by one dollar—so there is little evidence for a “multiplier effect” in the short run, but also little evidence for “crowding out” in the short run. (Perhaps both effects are at work, but they just happen to balance out in practice.) Let’s use these estimates as a rule of thumb to solve the following economic puzzles:

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Question

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Question

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Question

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