Assume the tax multiplier is estimated

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Assume the tax multiplier is estimated to be 1.6 and the aggregate supply curve has its usual upward slope. Suppose the government lowers taxes by $138 million. Will aggregate demand increase or decrease and by how much?

Reference no: EM131112243

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Assume the tax multiplier is estimated : Assume the tax multiplier is estimated to be 1.6 and the aggregate supply curve has its usual upward slope. Suppose the government lowers taxes by $138 million. Will aggregate demand increase or decrease and by how much?

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