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Explain the likely impact of the tax cut on the economy

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Reference no: EM131970061

Assume that the country of Corruptville is run by President Iduncare who is the leader to the political party 'Severing Corruptville's Allegiance Members' (SCAM for short). Currently, Corruptville is holding a presidential election. President Iduncare is worried he will not enough votes for SCAM to win power in Corruptville. As such, he decides to win the people of Corruptville's votes by cutting taxes. Using the Keynesian model, illustrate and explain the likely impact of the tax cut on the economy. Based on the information provided in this question what is one limitation of fiscal policy?

Reference no: EM131970061

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