Which of the Following Is an Argument for Tax Cuts

Multiple Choice

Which of the following is an argument for tax cuts rather than government spending as a way to promote recovery from a recession?

A) Tax cuts are better suited to direct resources into projects that consumers value more highly than the resources required for their production.
B) 100 percent of a tax cut will stimulate aggregate demand, but this will not be the case for an increase in government expenditures.
C) Tax cuts will encourage rent seeking; increases in government spending will not.
D) Tax cuts will change the structure of aggregate demand more than increases in government spending.