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melamori03 [73]
3 years ago
12

Which of the following best explains why a $7 billion tax cut can lead to a $9 billion increase in consumer spending in the shor

t run?
Social Studies
1 answer:
Hoochie [10]3 years ago
3 0

Below are the choices:

A. Tax cuts increase disposable income, which leads to a higher national income and additional consumer spending. 

<span>B. Tax cuts reduce government spending, which encourages consumer spending. </span>

<span>C. Tax cuts reduce interest rates, which stimulates consumer spending and borrowing. </span>

<span>D. Tax cuts increase government transfer payments, which leads to a higher national income and additional consumer spending.
</span>
The answer is A. 
Also increases government revenue in the long run. Tax cuts increase consumer spending which creates growth, which creates more jobs (tax payers)
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