As Compared to Government Spending, Spending Generated by a Tax

question 135

Multiple Choice

As compared to government spending, spending generated by a tax cut is likely to affect aggregate demand

• A)more quickly and more likely to be spent on projects with little benefit.
• B)more quickly but less likely to be spent on projects with little benefit.
• C)less quickly but more likely to be spent on projects with little benefit.
• D)less quickly and more likely to be spent on projects with little benefit.

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Definitions:

Worn-Out Capital

Assets that have reached the end of their useful life in production processes, often leading to decreased efficiency and increased maintenance costs.

National Income Accounting

A statistical approach that measures the overall economic activity and income of a country.

Economic Welfare

The overall well-being and standard of living of people in an economy, often measured by standards such as health, education, and income.

Negative Externalities

occur when the production or consumption of goods and services imposes costs on third parties not involved in the transaction.