What would be the effect of each of the following on aggregate demand or on aggregate supply,
Question:
What would be the effect of each of the following on aggregate demand or on aggregate supply, as indicated (always holding other things constant)?
a. A large cut in personal and business taxes (on
AD)
b. An arms-reduction agreement reducing defense spending (on AD)
c. An increase in potential output (on AS)
d. A monetary loosening that lowers interest rates (on AD)
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a A cut in personal and business taxes would cause the shortrun AD ...View the full answer
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