The Argument That an Increase in Government Expenditures Will Have

Multiple Choice

The argument that an increase in government expenditures will have a larger impact on aggregate demand than tax cuts is based on the idea that

A) tax cuts have no multiplier affect.
B) people will save part of a tax cut.
C) an increase in consumption expenditures has a smaller effect on real GDP than an equal increase in government expenditures.
D) None of the above is correct.