Government Spending Affects Aggregate Demand Directly, and Tax Changes Affect

question 181

Multiple Choice

Government spending affects aggregate demand directly, and tax changes affect aggregate demand indirectly.Therefore, changes in

• A)taxes are ineffective in changing aggregate demand.
• B)government spending affect aggregate demand more quickly than changes in taxes.
• C)taxes are virtually useless as a stabilization tool.
• D)government spending should be used with great caution.

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