Question from Past Macroeconomics Qualifying Exam (Spring, 2003 - Question four) at George Mason UniversityEdit

The Bush Administration has recently proposed to Congress a $674 billion program of economic stimulus. Briefly outline the content of this proposal. Evaluate the macroeconomic impact of this proposal, if enacted in 2003, by the time of the 2004 elections from the perspective of:

  • a. Old Keynesians
  • b. Monetarists
  • c. New Classicals
  • d. New Keynesians
  • e. What is your own view on this issue?


  • (a) Will increase GDP
  • (b) Fiscal policy not as effective and might be counter-cyclical because it takes so long to implement.
  • (c) Will have no effect because it is anticipated
  • (d) Will case people to produce more and then there will be a rise in economic activity.
  • (e) This is just an excuse to increase the size of government.

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