One Argument in Favour of Tax Cuts Over Spending on Infrastructure

question 43

Multiple Choice

One argument in favour of tax cuts over spending on infrastructure to increase production is that:

• A) tax cuts increase the MPC by a larger amount than spending on infrastructure.
• B) tax cuts increase planned spending,but spending on infrastructure offsets private spending.
• C) the tax multiplier is larger than the government spending multiplier.
• D) it takes longer to implement spending on infrastructure than to implement tax cuts.

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Definitions:

Texas Insurance

Insurance products and services regulated and offered within the state of Texas, covering various sectors like health, auto, and property.

Call Premium

The additional amount over the bond's face value that must be paid to call a bond before its maturity date.

Put Contract

An options contract that gives the holder the right to sell a specified amount of an underlying security at a specified price within a specified time.

Put Premium

The price that must be paid to purchase a put option, which gives the holder the right but not the obligation to sell a specified quantity of an underlying asset at a set price within a specified time.