Which of the Following Statements About the Tax Cut Enacted

question 16

Multiple Choice

Which of the following statements about the tax cut enacted in 1981 during the Reagan administration is correct?

• A)The tax cut caused the recession of 1982.
• B)The tax cut and the recession of 1982 combined to produce one of the largest peace-time deficits ever experienced up to that time.
• C)The tax cut stimulated a large increase in economic activity and led directly to the balanced budget of 1982.
• D)The tax cut was opposed by the "supply side" economists in President Reagan's administration.
• E)The tax cut was favored by Congress but opposed by the President and passed over his veto.

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