Final answer:
The short-term multipliers for infrastructure investment are higher compared to a reduction in corporate income taxes. This is due to the immediate demand for labor and materials that infrastructure projects generate, leading to a quicker economic boost.
Step-by-step explanation:
The short-term multipliers for infrastructure investment are generally thought to be higher when compared to a reduction in corporate income taxes. This is because spending on infrastructure can quickly lead to increased employment, as projects typically need lots of labor to get off the ground. Comparatively, tax cuts may lead to higher profits for corporations, but there is no guarantee that this will immediately translate into increased investment or employment.
In the short-term, government spending on infrastructure creates jobs and stimulates demand for materials and services, which can lead to a boost in economic activity. Over the long-term, improved infrastructure can increase productivity by making transportation and communication more efficient. On the other hand, reductions in corporate income taxes might lead to increased investments by businesses, but these effects are often slower to materialize and depend on business confidence and other external economic conditions.