Governemt Stimulus

When the economy goes bad, ie. many people are out of work (high unemployment rate) and the growth of the economy is slow, the government often does something to help the economy recover quickly.  This economic stimulation is called a “government stimulus” or a stimulus package.

A stimulus package could come in many forms.  The government could give people “tax breaks” which means that the people would have more money to spend.  When people spend more money, the businesses make more money and the economy gets going again.

Another form of a stimulus is when the government invests money in infrastructure like building new roads and bridges.  This creates a lot of new jobs and also indirectly benefits anyone who will use these new roads and bridges.  The new roads could prevent heavy traffic and save time and money for many companies.

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