The nearly $800 billion stimulus package passed in the United States in 2009 focused more on spending than on taxes partly because
A) increased spending leads to a larger increase in GDP than does the same reduction in taxes.
B) increased spending leads to a smaller increase in GDP than does the same reduction in taxes.
C) the government tax multiplier is more than the government spending multiplier.
D) the government revenue multiplier is about the same as the government tax multiplier.

Question

Quizplus · Accepted Answer

The government believed that increased spending would lead to a larger increase in GDP than the same reduction in taxes, as spending has a larger multiplier effect on the economy than tax cuts. Additionally, the government wanted to target specific areas for investment and job creation through direct spending rather than relying on individuals to spend their tax savings in certain areas.

The Nearly $800 Billion Stimulus Package Passed in the United