The Nearly $800 Billion Stimulus Package Passed in the United

question 179

Multiple Choice

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.

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Definitions:

Economic Development

The process by which the economic well-being and quality of life of a nation, region, or local community are improved according to targeted goals and objectives.

Birth Rate

Birth rate is a demographic measure representing the number of live births per 1,000 people in a given year.

Military Spending

The portion of a national budget allocated for defense and security forces.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured by the rise in GDP.