Which of the following statements about taxation is incorrect?
a. A tax cut affects aggregate demand indirectly.
b. A tax cut raises income and expenditures.
c. Cutting taxes by $20 is not the same as increasing government spending by $20.
d. A change in taxes does not affect consumption.
e. An increase in taxes decreases income and expenditures.
d
You might also like to view...
An indication that Insurance companies anticipate adverse selection is
a. they require a deductible b. they do not classify clients into different risk types according to their claim history c. they do not classify clients into different risk types according to pre-existing conditions d. they do not require a co-payment
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.