Suppose There Are Two Policy Options Facing a Vote in the Senate

question 236

Multiple Choice

Suppose there are two policy options facing a vote in the Senate. In the first, government spending will increase $50 billion, while the second option is to cut taxes by $50 billion. A Keynesian economist would argue for

• A)the tax option because it also affects the incentives workers face. Long-run aggregate supply will increase with the tax cut, but not with the spending increase.
• B)the tax option because it is easier to pass. The effects on total spending would be identical.
• C)the spending option because it won't affect the deficit the way the tax cut would.
• D)the spending option because it has a bigger impact on total spending. The spending directly raises total spending plus it works through the multiplier, while the tax cut only works through the multiplier.

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Definitions:

Actual Computation

The process of performing a mathematical calculation or data processing task in real-time or within a computing system.

Moore's Law

An observation noting the doubling of integrated circuit capacity approximately every two years, reflecting rapid advancements in computer technology.

Microprocessor Complexity

Refers to the intricate design and architecture of microprocessors, including the number of transistors and the processing power.

Months

Units of time, typically used to measure durations or periods within a year, each consisting of a varying number of days.