Statement 1: A tax cut will have the same impact on the recessionary gap as an increase in G only if people spend the entire tax cut. ( LO1 )

Statement 2: The paradox of thrift is more relevant today, when savings are so low, than it was back in the 1950s and 1960s.

a) Statement 1 is true and statement 2 is false.

b) Statement 2 is true and statement 1 is false.

c) Both statements are true.

d) Both statements are false.