Which of the following is true of taxation as a tool of fiscal policy?
A) Compared to government expenditure, tax cuts are less effective at increasing total expenditure.
B) When the marginal propensity to save is high, tax cuts are highly effective in increasing
C) Tax cuts create an immediate change in consumers' income and consumption.
D) Compared to government expenditure, tax cuts have a longer time lag.
Correct Answer:
Verified
Q39: What does the balanced budget multiplier state?
A)
Q40: The value of the multiplier increases when
Q41: How is the multiplier calculated in an
Q42: The total outstanding government debt from borrowings
Q43: The economy's structural deficit widens when _.
A)
Q45: During a recession, tax cuts are considered
Q46: An economy's structural budget _.
A) is not
Q47: The government collects data on economic activity
Q48: Which of the following is true of
Q49: The private sector will have to borrow
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