A $10 million increase in government spending has a different economic impact to a $10 million tax cut.

Question

Quizplus · Accepted Answer

A $10 million increase in government spending would directly inject $10 million into the economy, while a $10 million tax cut would depend on how individuals and businesses choose to spend or save the extra money. Some may use it to boost consumption and investment, while others may save it or use it to reduce debt. Therefore, the economic impact of the two policies may differ.

A $10 Million Increase in Government Spending Has a Different