comptonalex comptonalex
  • 03-03-2016
  • Business
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What is the theory that government spending and tax cuts can raise demand called?

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rube
rube rube
  • 03-03-2016
Its part of a Keynesian economics.  . It might also be called the pump-priming theory. It is correct by the way especially if you use a strict definition of the word "can." Tax cuts will only raise demand if they went to people who will spend most of what is cut from their taxes.
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