Increase in gdp compared to tax cut of same size

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Theoretically, government spending should always result in ________ increase in GDP compared to a tax cut of the same size because

a. a smaller; all money is spent with a tax cut whereas some of it is saved with government spending

b. a smaller; all money is spent with government spending whereas some of it is saved with a tax cut

c. a larger; all money is spent with a tax cut whereas some of it is saved with government spending

d. a larger; all money is spent with government spending whereas some of it is saved with a tax cut

e. a similar; they always have the exact same effect on the economy

Reference no: EM13836492

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