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* 2 1 . Based on the Keynesian model, one reason to support government spending increases over tax cuts as measures to increase output is
Based on the Keynesian model, one reason to support government spending increases over tax cuts as measures to increase output is that: a government spending increases the MPC more than tax cuts.b the governmentspending multiplier is larger than the tax multiplier.c governmentspending increases do not lead to unplanned changes in inventories, but tax cuts dod increases in government spending increase planned spending, but tax cuts reduce planned spending. One policy response to the US economic slowdown of was tax cuts. This policy response can be re presented in the ISLM model by shifting the'a. LM; right'b. LM; left'c. IS; right'd. IS; leftcurve to the Assume that planned expenditure consists of consumption, investment, and government expenditures onl y and that investment and government expenditures are fixed. Further, assume that consumption C c Y t Y where ty denotes taxes as a function of income. Calculate the equilibrium level of Y and the government e xpenditure multiplier.
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