The idea that a tax reduction funded by government borrowing has no effect on aggregate demand is known as

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The idea that a tax reduction funded by government borrowing has no effect on aggregate demand is known as the Ricardian equivalence theorem. The theorem suggests that individuals anticipate future taxes to repay the government's debt and, as a result, save more and consume less. Therefore, tax reduction funded by debt would not affect aggregate demand in the economy.

The Idea That a Tax Reduction Funded by Government Borrowing