Choose the statement that is incorrect.

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Part 1

A.

The demand-side effects of a tax cut are likely to be larger than an equivalent increase in government expenditure.

B.

The consensus is that the crowding-out effect is strong enough to make the government expenditure multiplier less than 1.

C.

The government expenditure multiplier is the quantitative effect of a change in government expenditure on real GDP.

D.

The tax multiplier is the quantitative effect of a change in taxes on real GDP.