Attempts in 2008 to jump-start the economy on the demand side included a large
A)increase in short-term interest rates.
B)increase in income tax rates.
C)cut in the size of tax rebate checks.
D)cut in short-term interest rates.

Question

Quizplus · Accepted Answer

Cutting short-term interest rates can increase consumer and business borrowing and spending, which stimulates demand in the economy. Increasing interest rates, income tax rates, or cutting the size of tax rebate checks can have the opposite effect, reducing demand and potentially slowing economic growth.

Attempts in 2008 to Jump-Start the Economy on the Demand