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1. Compare the total increase in spending on U.S. goods and services in rounds 1-14 with the tax rebate itself. Calculate the spending increase as a percent of the tax rebate.

Answer:

1. Keep in mind that in the absence of the tax rebate, 20% of the $230 billion spending decline would have been reduction in imports and 80% of it would have been reduction in the demand for domestic good and services. Was the tax rebate adequate to restore the demand for US goods and services?