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:

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