Choose the Correct Statement

question 58

Multiple Choice

Choose the correct statement.

• A)Tax cuts increase aggregate supply and aggregate demand.
• B)Tax cuts strengthen the incentive to work and to invest.
• C)The tax multiplier becomes smaller as time passes.
• D)According to Barro and Uhlig, tax cuts are a less powerful way to stimulate real GDP than spending increases.
• E)Both A and B are correct.

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Definitions:

Somalia

A country located in the Horn of Africa, known for its long coastline, cultural heritage, and significant challenges including political instability, piracy, and humanitarian crises.