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Which policy will stimulate greater spending by consumers

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Reference no: EM131974626

Consider two policies - a tax cut that will last for only one year and a tax cut that is expected to be permanent

1. Which policy will stimulate greater spending by consumers?

2. Which policy will have a greater impact on aggregate demand?

3. Would it make any difference if the tax cut were a reduction in the GST rate or a reduction in income tax rates?

Reference no: EM131974626

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