In a Keynesian model, why would a $100 million rise in government spending on goods and services produce a larger effect on aggregate demand than a $100 million fall in tax revenue?
- AConsumers spend only part of any extra disposable income.
- BGovernment expenditure does not create wealth.
- CThe marginal tax rate affects the value of the multiplier.
- DThe multiplier does not apply to consumer expenditure.