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1. Assume that the Bangladesh government implements a tax cut in response to the Covid-19 outbreak. Explain how tax cuts can impact both aggregate demand
1. Assume that the Bangladesh government implements a tax cut in response to the Covid-19
outbreak. Explain how tax cuts can impact both aggregate demand and aggregate supply. Give an
example of each.
2. Assume that depositors start withdrawing money in unprecedented amounts from their bank
account during the Covid-19 pandemic. Also, suppose that very few people are depositing money
into their accounts. Describe the process by which this will affect the money supply in the
economy.
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