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6 Multiplier Effect and Crowding out Effect of Fiscal Policy under ZLB Let us consider the following fiscal stimulus plan shifts the aggregate demand curve

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6 Multiplier Effect and Crowding out Effect of Fiscal Policy under ZLB Let us consider the following fiscal stimulus plan shifts the aggregate demand curve from AD, to AD2. AD AD2 AS 3 2 47. (1 point) The partial equilibrium multiplier effect is A. Ya - Y2 B. Y2 - YI C. Ya - Yl D. Y2 - Ya 48. (1 point) The general equilibrium multiplier effect is A. Ya - Y2 B. Y2 - YI C. Ya - YI D. Y2 - Ya 49. (1 point) The crowding out effect is A. Ya - 12 B. Y2 - YI C. Ya - YI D. Y2 - Y's 50. (1 point) Under the ZLB, the fiscal expansionary policy is effective than the normal caSC. A. more B. less C. equally D. uncertain 12

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