6. Changes in taxes The following graph plots an aggregate demand curve. Using the graph, shift...

  

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6. Changes in taxes The following graph plots an aggregate demand curve. Using the graph, shift the aggregate demand curve to depict the impact that a tax cut has on the economy. PRICE LEVEL 130 120 110 100 90 80 60 70 0 Aggregate Demand 10 10 20 30 OUTPUT 40 50 60 Aggregate Demand ? Suppose the governments of two very similar economies, economy N and economy M, implement a tax cut of equal size. The tax cut in economy N is permanent, while the tax cut in economy M is temporary. The economies are otherwise completely identical. The tax cut will have a larger impact on aggregate demand in the economy with the Suppose the governments of two very similar economies, economy N and economy M permanent tax cut of e permanent, while the tax cut in economy M is temporary. The economies are otherwis The tax cut will have a larger impact on aggregate demand in the economy with the temporary tax cut 1. 6. Changes in taxes The following graph plots an aggregate demand curve. Using the graph, shift the aggregate demand curve to depict the impact that a tax cut has on the economy. PRICE LEVEL 130 120 110 100 90 80 60 70 0 Aggregate Demand 10 10 20 30 OUTPUT 40 50 60 Aggregate Demand ? Suppose the governments of two very similar economies, economy N and economy M, implement a tax cut of equal size. The tax cut in economy N is permanent, while the tax cut in economy M is temporary. The economies are otherwise completely identical. The tax cut will have a larger impact on aggregate demand in the economy with the Suppose the governments of two very similar economies, economy N and economy M permanent tax cut of e permanent, while the tax cut in economy M is temporary. The economies are otherwis The tax cut will have a larger impact on aggregate demand in the economy with the temporary tax cut 1.