Brief Principles of Macroeconomics...
Solutions
Brief Principles of Macroeconomics...
According to traditional Keynesian analysis, which has a larger impact on GDP—a dollar of tax cuts or a dollar of additional government spending? Why?
The impact on GDP by tax cuts and government spending.
Traditional Keynesian analysis indicates that a dollar of additional government spending is a more potent tool than a dollar of tax cuts. This is because, when the government gives a dollar in tax cuts, then a part of that dollar may be saved rather t...
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