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c. Expectations of a future policy reversal weaken fiscal policy because multiple choice 3 consumers may hesitate to increase their spending because they believe that
c. Expectations of a future policy reversal weaken fiscal policy because multiple choice 3 consumers may hesitate to increase their spending because they believe that tax rates will rise again. interest rates will usually rise, offsetting any change in fiscal policy. tax cuts are combined with spending increases so there is no real effect. people tend to make decisions based on pre-tax income
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