Economist Z believes that the government spending multiplier is larger than the tax multiplier,and thus would tend to prefer ________________ when expansionary _______________ policy is needed to raise aggregate demand.

Question

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Economist Z believes that the government spending multiplier is larger than the tax multiplier, which means that an increase in government spending would have a greater impact on increasing aggregate demand than a decrease in taxes. Therefore, when expansionary fiscal policy is needed to raise aggregate demand, Economist Z would prefer more government spending rather than tax cuts.

Economist Z Believes That the Government Spending Multiplier Is Larger