The policies of the federal government influence the outcomes of the various activities in that economy. When government policies change or unplanned events occur, the resulting economic events or activity will usually change. Listed below is a policy or event that affect the performance of the economy: The federal government, in an effort to stimulate the economy, decreases taxes on all individuals except those earning over $250,000 per year. For the items above, describe what would be the likely outcome in the economy. Use the appropriate tools of analysis, such as aggregate demand and aggregate supply where appropriate, to justify and explain your answer.

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Q: Social Security system levies a tax on workers and pays benefits to the elderly. Suppose that…

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Q: Expenditures are always made with clear policy to guide them. Politics never enters the equation?…

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Q: Tools ofmonetary policy and fiscal policy?

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Q: Which of the following is NOT counted in the "G" component of spending Group of answer choices the…

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Laffer Curve Analysis

In terms of economics, the Laffer curve was popular among those economists who were or who belonged to the supply side of the economic peripheral.  This concept was popularized by the famous supply-side economist known as Arthur Laffer. This curve illustrated the relationship between the tax rates and government revenue. It is already known that the tax which the public or individuals residing in an economy bear is the revenue or income of the government with the help of which the government does all the necessary works in the society, which is beneficial for the economy.