Effects of fiscal policy, Macroeconomics

(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?

 

Posted Date: 3/13/2013 2:30:26 AM | Location : United States







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