Historically, Keynesian economists have argued that government spending will stimulate aggregate demand more than tax cuts because
A) government spending will stimulate aggregate demand more quickly than a tax cut.
B) there are fewer adverse side effects to an increase in government spending.
C) all of the spending will add to aggregate demand, but a portion of the tax cut will be saved.
D) an increase in government spending can quickly be reversed once the economy has recovered.

Question

Quizplus · Accepted Answer

Keynesian economists argue that government spending will stimulate aggregate demand more than tax cuts because all of the spending will add to aggregate demand, but a portion of the tax cut will be saved. This means that government spending is seen as more effective in stimulating economic growth and reducing unemployment in the short run. However, it is important to note that there are various factors that may affect the effectiveness of government spending and tax cuts, and the optimal policy mix may differ depending on the economic conditions and the specific policy goals.

Historically, Keynesian Economists Have Argued That Government Spending Will Stimulate