Two fiscal policy options

Reference no: EM1366704

Which of the following changes to fiscal stimulus package of 2009 for $862 billion (under the bill called American Recovery and Reinvestment Act of 2009) would have a larger overall impact on AD? Explain your answer with credible logic and analysis.

A) A program of tax rebates, distributed uniformly across the population of those filing tax returns, amounting to $862 billion in total rebates.

Alternatively,

B) An $862 billion increase in federal government spending on repairs to highways and bridges, including other related infrastructure.

Reference no: EM1366704

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