Asked by Jordyn Mercedes on May 09, 2024
Verified
Which of the following statements about the tax cut enacted in 1981 is correct?
A) The tax cut caused the recession of 1982.
B) The tax cut and the recession of 1982 combined to produce one of the largest peace-time deficits ever experienced up to that time.
C) The tax cut stimulated a large increase in economic activity and led directly to the balanced budget of 1982.
D) The tax cut was opposed by supply-side economists.
E) The tax cut was favored by Congress but opposed by the President and passed over his veto.
Tax Cut
A reduction in the amount of taxes imposed by a government on its citizens, often aimed at stimulating economic growth.
Peace-Time Deficits
Refers to budget deficits that occur during periods without major wars, often resulting from government spending on public services and welfare rather than military expenditures.
Economic Activity
The processes that include creating, sharing, and using products and services in an economic system.
- Understand the impact of government spending and taxation policies on the budget shortfall and overall national indebtedness.
- Understand the evolution and shifts in policies affecting budget deficits and national debt in the U.S.
Verified Answer
Learning Objectives
- Understand the impact of government spending and taxation policies on the budget shortfall and overall national indebtedness.
- Understand the evolution and shifts in policies affecting budget deficits and national debt in the U.S.
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