Because fluctuations in the world oil price make the U.S. short-run macroeconomic equilibrium fluctuate, someone suggests that

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Because fluctuations in the world oil price make the U.S. short-run macroeconomic equilibrium fluctuate, someone suggests that the government should vary the tax rate on oil, lowering the tax when the world oil price rises and increasing the tax when the world oil price falls, to stabilize the oil price in the U.S. market. 

How would such an action influence aggregate supply?

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Foundations Of Economics

ISBN: 9780135897478

9th Edition

Authors: Robin Bade, Michael Parkin

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