One Argument in Favor of Tax Cuts Over Spending-Based Fiscal

question 26

Multiple Choice

One argument in favor of tax cuts over spending-based fiscal stimulus is that:

• A) tax cuts increase the MPC by a larger amount than government spending.
• B) tax cuts temporarily increase planned spending, but government spending permanently increases private spending.
• C) in theory the tax multiplier is larger than the government spending multiplier.
• D) historically tax cuts have been more successful than spending-based fiscal stimulus.

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Definitions:

Persistent Irritability

A long-term temperament of being easily annoyed or provoked to anger.

Dissociative Disorders

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Neurotransmitter Glutamate

Glutamate is a key neurotransmitter in the brain that plays an important role in learning and memory by transmitting nerve signals.

Voluminous Hippocampus

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