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(Effects of Fiscal Policy) Recently some legislators have called for tax increases to reduce the federal budget deficit. Conservatives have countered that such tax increases could plunge the economy into a recession. Using aggregate supply and aggregate demand, explain how increases in taxes would lead to a loss of output and a dampening of prices. Are there arguments on both sides?

 

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M9528135

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