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Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884 Exercise 8
Use the following news clip and fact to work the Problem
Senate Approves Obama Tax Cut Plan
The U.S. Senate has passed legislation extending Bush-era tax cuts for middle-class Americans earning up to $250,000 per year.
Fact : Middle and low-income earners spend almost all their disposable incomes. High-income earners save a significant part of their disposable incomes.
What would have a larger effect on aggregate demand: extending the Bush-era tax cuts to everyone; extending them for middle-class only; or extending them for high-income earners onlyHow would each alternative compare with no tax cuts but an equivalent increase in government expenditure?
Senate Approves Obama Tax Cut Plan
The U.S. Senate has passed legislation extending Bush-era tax cuts for middle-class Americans earning up to $250,000 per year.
Fact : Middle and low-income earners spend almost all their disposable incomes. High-income earners save a significant part of their disposable incomes.
What would have a larger effect on aggregate demand: extending the Bush-era tax cuts to everyone; extending them for middle-class only; or extending them for high-income earners onlyHow would each alternative compare with no tax cuts but an equivalent increase in government expenditure?
Explanation
Verified
Verified
Fiscal stimulus:
It is observed that lo...
Macroeconomics 11th Edition by Michael Parkin
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