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$787b Stimulus Bill Approved
Washington-Less than one month after President Obama took office, Congress last night passed his flagship proposal, an unprecedented collection of tax cuts and new spending that Democrats say offers the country its best hope to stave off an impending depression. After a frenzied month of legislating, the House and Senate produced an economic stimulus bill approximate d yesterday to cost $787 billion, with $281 billion in new tax cuts and the remainder in one-time spending on infrastructure investments, expanded unemployment benefits, and other programs. It passed both chambers on a largely party-line vote, winning the support of no Republicans in the House and three in the Senate.
(a) Explain how more did the average household spend on appliances, elect Jorgeics, and furniture when it received the 2008 tax rebate?
(b) If the MPC was 0.9, Explain how more would cumulative spending increase as a result?
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Carefully explain how these two deficits are related economically so that changes in one are reflected in changes in the other.
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