Decreasing taxes can stimulate the economy by ________
A) allowing consumers more money to spend
B) decreasing the amount of money the government is able to spend
C) directly influencing the consumer price index
D) controlling the money supply
E) helping to contain an economy that is growing too quickly
A
Explanation: A) Decreasing taxes means that consumers have more money to spend. However, consumers may save money that accrues as a result of tax decreases. This would not stimulate the economy, which relies on consumer spending.
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