Reference no: EM131096132

The republic of Oakland is recovering from a financial crisis that resulted in a fall is the GDP growth rate and widespread unemployment. The prime minister has set up a crisis Recovery taskforce to discuss measure that will receive the economy. Katie Scherbatsky, who was appointed to the taskforce by the prime minister, claims that Oakland should focus on boosting aggregate demand by increasing net exports. She suggests that the government should do this by providing tax sops and incentives to export companies, Eric Paulo, who is also part of the taskforce, does not agree with Katie. He argues that in order to increase GDP, stagnant domestic consumption should be revived. He proposes tax cuts as the best measure to achieve this. Which of the following, will weaken Eric's claim that tax cuts would increase domestic consumption sustainability? A. In spite of being severely affected by the financial crisis, Oakland remains one of the best countries for basic science research. B. the financial crisis adversely affected banks in a neighboring country following which its government introduced a fiscal stimulus package. C.with population growth outpacing the growth in food supply, oakland has been experiencing a relatively high and persistent rate of inflation. D. The government of Oakland recently increased unemployment benefits and social security payments to its citizens.