A "conservative" would most likely argue in favor of
a. tax increases when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary.
b. tax cuts when fiscal restraint is necessary, and spending cuts when fiscal stimulus is necessary.
c. tax cuts when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary.
d. spending increases when fiscal expansion is necessary, and tax increases when fiscal stimulus is necessary.
c
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Which of the following is (are) correct? In the classical system, the suppliers of bonds were the
a. government which always sold bonds to finance a new project. b. firms which financed all investment expenditures by selling bonds. c. government which might sell bonds to finance spending in excess of tax revenues. d. Both b and c.
When the Fed sells government bonds to a bank, the initial effect on the bank is that its
a. assets increase b. assets remain the same c. liabilities decrease d. assets decrease e. liabilities increase