Question

suppose that congress enacts a significant tax cut with the expectation thatthis action will stimulate sggregated demand and puch the real gdp in the short run. in gact, however, neither real gdp now the price level changes significantly as a result of the tax cut. what might account for this outcome?

Answer 1

Tax cuts don't produce income for the government because businesses don't hire enough people to offset this loss of revenue to the government.