How much would cumulative spending increase as a result

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Reference no: EM13213257

Just How Stimulating Are Those Checks? To get an idea of how much those government rebate checks have spurred spending-and who's benefiting from the buying-business school professors Jonathan Parker (Northwes t ern) and Christian Broda (University of Chicago) analyzed the spending of 30,000 rebatereceiving households. Using data provided by ACNielsen's Homescan, whose participants scan the barcodes on their purchases into a database, the researchers found the rebates "clearly have increased household spending," Parker says. Lower-income households boosted consumption most-spending 6 percent more, compared with a 3.5 percent rise across all households. -Tara Kalwarski THE 2008 REBATE BOOST: Additional dollars spent due to stimulus checks* Appliances, electronics, and furniture = $91 Entertainment and personal services = $87 Food, health, beauty, and household products = $60 Clothing, shoes, and accessories = $32 7.

( a ) According to the News on page 238, how much more did the average household spend on appliances, electronics, and furniture when it received the 2008 tax r e bate?

(b) If all 110 million households did so, how much did aggregate consumption i n crease?

( c ) If the MPC was 0.75, how much would cumulative spending increase as a r e sult?

Reference no: EM13213257

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