IN THE NEWS 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 (Northwestern) and Christian Broda (University of Chicago) analyzed the spending of 30,000 rebate-receiving households. Using data provided by AC-Nielsen'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. Source: Kalwarski, Tara. "Just How Stimulating Are Those Checks?" Businessweek, September 8, 2008, p. 14 Copyright(c)2015. All rights reserved. Used with permission of Bloomberg L.P. 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 Appliances, electronics, and furniture $91 Entertainment and personal services $87 Food, health, beauty, and household products $60 Clothing, shoes, and accessories $32 "Average por rebote-receiving household. Instructions: Enter your responses as a whole number. a. How much more did the average household spend on appliances/electronics/furniture when it received the 2008 tax rebate? b. If all 110 million households did so, how much did aggregate consumption increase? million c. If the MPC was 0.8, how much would cumulative spending increase as a result? million