Personal Debt and Tax Cuts. Suppose you had a large unpaid balance on your credit card and were paying a high rate of interest. You then received a one-time tax rebate from the government and decided...

Personal Debt and Tax Cuts. Suppose you had a large unpaid balance on your credit card and were paying a high rate of interest. You then received a one-time tax rebate from the government and decided to pay down the balance on your credit card. If there were many others like you in the economy, would the tax cut be an effective stimulus? (Related to Application 3 on page 245.)