Which sentence is true?

Question

Options:

A . An increase in the government revenues due to a tax raise stimulates the economic activity

B . A cut in public spending or a tax raise or both tend to depress aggregate demand

C . An increase in public spending causes a fall in the overall economic activity

D . Only (a) and (c) are true

Answer: Option B
:
B
Both cut in spending and rise in taxes will reduce aggregate demand and bring down economic activity.

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