Q2. Below is the US evidence on the size of short run fiscal multipliers during the great recession of 2008-2009.

Fiscal Bang for the Buck One-year $ change in real GDP per $ reduction in federal tax revenue or increase in spending Tax Cuts Nonrefundable Lump-Sum Tax Rebate 1.02 Refundable Lump-Sum Tax Rebate 1.26 Temporary Tax Cuts Payroll Tax Holiday 1.29 Across the Board Tax Cut 1.03 Accelerated Depreciation 0.27 Permanent Tax Cuts Extend Alternative Minimum Tax Patch 0.48 Make Bush Income Tax Cuts Permanent 0.29 Make Dividend and Capital Gains Tax Cuts Permanent 0.37 Cut Corporate Tax Rate 0.30 Spending Increases Extend Unemployment Insurance Benefits 1.64 Temporarily Increase Food Stamps 1.73 Issue General Aid to State Governments 1.36 Increase Infrastructure Spending 1.59 Source: Moody's Economy.com