How can tax cuts during a recession influence economic recovery, considering the role of fiscal multipliers?

Tax cuts during a recession can help boost economic recovery by putting more money in people's pockets. When the government reduces taxes, individuals and businesses have more disposable income, which they can spend on goods and services. This increased spending can lead to higher demand, encouraging businesses to produce more and potentially hire more workers. The concept of fiscal multipliers is important here; it suggests that the initial increase in spending can lead to even greater overall economic growth as it circulates through the economy. For example, if a family saves money from a tax cut and then spends it on a new appliance, the store owner may then hire a worker to help meet the demand, creating more jobs and further stimulating the economy.