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Effects of tax rebates and government spending

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Which of the following changes to fiscal policy would have a larger overall impact on Aggregate Demand? Explain your answer in a paragraph or 2.

-A program of tax rebates, distributed uniformly across the population of those filing tax returns, amounting to $10 billion in total rebates.
-OR-
-A $10 billion increase in federal government spending on repairs to highways and bridges.

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Effects of tax rebates and government spending on supply and demand.

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Hi,

Aggregate demand is the demand for goods and services. So, let's think about what would happen in the case of a tax return. Actually, this actually occurred a few years ago, as an attempt to jumpstart the economy. (It turned out that it wasn't exactly a rebate, but most people didn't know that. Look here: http://boren.nu/archives/2001/07/26/surprise-tax-rebate-not-a-rebate/)
When the money was received, it wasn't really that much. Certainly, some people probably rushed out and spent it. But based on my ...

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