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3. The impact of a tax cut (a) On the Keynesian cross (b) On the IS-LM equilibrium

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. The impact of a tax cut
(a) On the Keynesian cross
(b) On the IS-LM equilibrium

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What takes place when the economy reaches potential GDP and the aggregate supply becomes vertical?. The potential GDP is vertical only the traditional AD-AS model. c, The potential GDP is vertical only in both the income-expenditure model and the traditional AD-AS model. The potential GDP is vertical only in the income-expenditure model.
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In macroeconomics, in the Keynesian range of the AS curve _______________. Group of answer choices a decrease in aggregate spending would increase real GDP an increase in aggregate expenditure would decrease real GDP a decrease in aggregate expenditure would not have much impact on prices an increase in government spending would drastically increase the price level
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