Tax cuts
A)cause unemployment.
B)will surely make the government default on its debts.
C)may have no effect, if people take account of future taxes.
D)always stimulate economic activity.
E)cause the government to borrow less.

Question

Quizplus · Accepted Answer

Tax cuts may have no effect on economic activity if people anticipate future taxes and therefore save the extra money instead of spending it. The other options are not necessarily true for all situations.

Tax Cuts