A Federal Reserve publication made the following observation: “Some studies directly estimate the so-called fiscal multiplier—the response of GDP to a policy change affecting government spending or tax revenue—and test whether this multiplier depends on the state of the economy.” 

a. What do the authors mean by “the state of the economy”? Why might the state of the economy matter for the size of the multiplier? 

b. The authors note that it is difficult for economists to conduct these studies because of a “historical rarity.” What might be a historically rare event in this context?