A Senator States, "We Need to Cut Taxes in Order

Multiple Choice

A senator states, "We need to cut taxes in order to increase incentives to work and produce, so that we can pull the nation out of this economic slump." A mainstream economist who is a critic of this
Policy would likely reply that

A) rather than cutting taxes, there should be a decrease in government spending to address the problem.
B) rather than cutting taxes, monetary policy should become tighter to control the inflation rate.
C) increasing government spending is a surer way to increase production and pull the nation out of this economic slump.
D) cutting taxes will only reduce output further and aggravate the situation.