Many U.S. households either saved the money they received from the 2008 economic stimulus or used it to pay down credit card loans. What effect did this have on the economy?

Question

Multiple choice question.

It moved the economy into recession.

It had little effect.

It moved the economy out of recession.

It moved the budget from deficit to surplus.

Answer 1

The correct answer is:

It had little effect.

While some households saved their stimulus payments or used them to pay down debt, this behavior did not significantly boost consumer spending or the overall economy in the short term. As a result, the stimulus did not have a strong immediate impact on economic recovery from the recession.