President George W.Bush billed his $1.35 trillion tax cut in 2001 as both an immediate economic stimulus to fight the current recession as well as a long-term boost to economic growth.

A) it contributed to the budget surpluses continuing through his administration.
B) the tax cut caused no effect on the government surpluses/deficits in following years.
C) it resulted in a rapid and expanding government deficit.
D) it greatly improved the well being of the lower and middle income citizens.

Question

amira fouda · Accepted Answer

Final Answer : C, Explanation :  The tax cut resulted in a rapid and expanding government deficit. Despite the long-term growth argument, the immediate impact of the tax cut was a decrease in government revenue, which contributed to a large government deficit. The budget was projected to shift from a surplus of $128 billion in 2001 to a deficit of $157 billion in 2002.

Definitions

Learning Objectives

Learning Objectives

Related questions