The effectiveness of any stimulus program depends on:
A)the nature of the tax only
B)the size of the tax and spending multipliers
C)the nature of the tax and tax multipliers
D)the income group targeted
E)the marginal propensity to consume only

Question

Quizplus · Accepted Answer

The effectiveness of a stimulus program depends on the size of the tax and spending multipliers. A larger multiplier indicates that the program will have a greater impact on stimulating the economy. The nature of the tax and tax multipliers, as well as the income group targeted and the marginal propensity to consume, can also play a role in the effectiveness of the program, but their impact will be secondary to the size of the multipliers.

The Effectiveness of Any Stimulus Program Depends On