Answered: Which of the following is not a valid…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 1SQ

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Question

Which of the following is not a valid point in debating the merits of increasing government expenditures or cutting taxes during a recession?

a. A cut in the marginal tax rate increases the incentives to find a job and work longer hours.

b. Consumers will save a portion of a tax cut.

c. The government may use the increase in expenditures on projects with little value, particularly, if it wishes to respond quickly.

d. There is no evidence that tax cuts have been followed by increases in economic growth.

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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