Based on the Keynesian Model,one Reason to Support Spending Increases

question 97

Multiple Choice

Based on the Keynesian model,one reason to support spending increases over tax cuts as measures to increase output is that:

• A) government spending increases the MPC more than tax cuts.
• B) the government-spending multiplier is larger than the tax multiplier.
• C) government-spending increases do not lead to unplanned changes in inventories,but tax cuts do.
• D) increases in government spending increase planned spending,but tax cuts reduce planned spending.

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