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According to new classical economists the reason that a tax cut does not shift the aggregate demand curve is: households increase their consumption and can
According to new classical economists the reason that a tax cut does not shift the aggregate demand curve is:
- households increase their consumption and can pay higher taxes in the future.
- real GDP does not chance because prices are inflexible.
- consumers anticipate the effect of an increase in government debt on future taxes.
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Inflation, Unemployment And Capital Malformations
Authors: Bernard Schmitt, Xavier Bradley, Alvaro Cencini
1st Edition
0429767064, 9780429767067
