Question 11: Which is likely to have greater impact in a *Keynesian* economic model? Question 11: Which is likely to have greater impact in a *Keynesian* economic model?A) $100M tax cutB) $100M increase in Defense Spending Solution $100 M tax cut will be more impact in an economy. because he argues that supply can not create its own demand so a tax cut may not show much impact on economy. tax cut in one side will be give an opportunity to purchase more goods and services in the other side. when the purchases increases, it leads to increase in GDP of the nation. so, option A is correct..

1. Question 11: Which is likely to have greater impact in a *Keynesian* economic model?
Question 11: Which is likely to have greater impact in a *Keynesian* economic model?A)
$100M tax cutB) $100M increase in Defense Spending
Solution
$100 M tax cut will be more impact in an economy. because he argues that supply can not create
its own demand so a tax cut may not show much impact on economy. tax cut in one side will be
give an opportunity to purchase more goods and services in the other side. when the purchases
increases, it leads to increase in GDP of the nation.
so, option A is correct.