Explain whether borrowing constraints increase or decrease the potency of fiscal policy to influence aggregate demand in

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Explain whether borrowing constraints increase or decrease the potency of fiscal policy to influence aggregate demand in each of the following two cases:
a. A temporary personal income-tax cut.
b. An announced future personal income-tax cut.

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Macroeconomics

ISBN: 978-1464168505

5th Canadian Edition

Authors: N. Gregory Mankiw, William M. Scarth

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Question Posted: Dec 31, 2015 01:40 AM

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Explain whether borrowing constraints increase or decrease the potency of fiscal policy to influence aggregate demand in

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The potency of fiscal policy to influence aggregate demand depends on the effect on consumption if c...View the full answer

Macroeconomics

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