Background Context:Fiscal policy is the regulation of taxes and government expenditures to achieve macroeconomic goals.

Question To Answer:

a) How did consumers spend their 2008 tax cut (News, p. 237 in your textbook)?

b) Does it matter what they spend it on, in terms of impact on Aggregate Demand (AD).(Hint: Refer back to Chapter 10 on injections and leakages). Explain your answer and provide your rationale.