Asked by Amber
Increased government
purchases, with taxes held constant, can eliminate a contractionary gap.
How could a tax cut achieve the same result? Would the tax cut have to
be larger than the increase in government purchases? Why or why not?
purchases, with taxes held constant, can eliminate a contractionary gap.
How could a tax cut achieve the same result? Would the tax cut have to
be larger than the increase in government purchases? Why or why not?
Answers
Answered by
economyst
Do a little research, then take a shot. What do you think?
Hint: be sure to read up on the money multiplier.
Hint: be sure to read up on the money multiplier.
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