Macroeconomics 11th Edition by Stephen Slavin

Exercise 64

Circle the letter that corresponds to the best answer. Statement 1: A tax cut will have the same impact on the recessionary gap as an increase in G only if people spend the entire tax cut.
Statement 2: The paradox of thrift is more relevant today, when savings are so low, than it was back in the 1950s and 1960s.
A) Statement 1 is true and statement 2 is false.
B) Statement 2 is true and statement 1 is false.
C) Both statements are true.
D) Both statements are false.