4 ms·
The question you have to ask is, where does this extra dollar come from? (owners' margins? wages of workers who are now unemployed? consumers' budgets?), and ho
by xixi77 13y ago
The question you have to ask is, where does this extra dollar come from? (owners' margins? wages of workers who are now unemployed? consumers' budgets?), and how much extra consumption it generates in the still-employed workers' pockets, compared to where it was before?
- nhaehnle 13y agoI guess we can agree that the money is shifted downwards in the income spectrum relative to where it was before. Other things equal, lower-income households have a higher marginal propensity to consume. So shifting money downwards will boost consumption.