When Fiscal Policy Is Done Through Tax Cuts Instead of Spending

question 155

Multiple Choice

When fiscal policy is done through tax cuts instead of spending increases:

• A) the resulting fiscal stimulus will be spent by the private sector.
• B) there are likely to be many "bridges to nowhere."
• C) the resulting spending won't pass the cost-benefit test.
• D) the resulting fiscal stimulus will be spent by the government.

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Definitions:

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