A temporary tax cut is not likely to be effective in stimulating aggregate demand if:a. the MPC is relatively high.b. the tax cut is large.c. the economy experiences a contractionary gap.d. people based consumption decisions on their level of permanent income.e. the short-run aggregate supply curve is relatively flat.

Taxation shows the act of imposing an involuntary levy on income, capital gains estates, property,…

A temporary tax cut is not likely to be effective in stimulating aggregate demand if: O a. the MPC is relatively high. O b. the tax cut is large. O . the economy experiences a contractionary gap. O d. people based consumption decisions on their level of permanent income. O e. the short-run aggregate supply curve is relatively flat.

A temporary tax cut is not likely to be effective in stimulating aggregate demand if: O a. the MPC is relatively high. O b. the tax cut is large. O . the economy experiences a contractionary gap. O d. people based consumption decisions on their level of permanent income. O e. the short-run aggregate supply curve is relatively flat.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Expectations Theory And The Economy

Section: Chapter Questions

Problem 10QP

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