Which Is More Likely to Stimulate Aggregate Demand in a Timely

question 72

Multiple Choice

Which is more likely to stimulate aggregate demand in a timely manner?

• A) a tax cut, because households will increase their consumption by the full amount of their tax reduction
• B) a tax cut, because disbursement can take place quickly while spending increases are generally spread out over several years
• C) a spending increase, because disbursement can take place quickly while a tax cut will be spread out over several years
• D) a spending increase, because it can be easily reversed once the economy has recovered

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Definitions:

Sociocultural Perspective

An approach in psychology that examines how societal and cultural influences shape individual behavior, attitudes, and development.

Zone of Proximal Development

A concept in cognitive development theory referring to the difference between what a learner can do without help and what they can achieve with guidance and encouragement from a skilled partner.

Recognition Memory

The ability to identify a previously encountered stimulus.

Recall

The mental process of retrieval of information from the past.