In Addition to the Multiplier and Crowding-Out Effects, a Tax

question 38

Essay

In addition to the multiplier and crowding-out effects, a tax change is a determinant of the size of the shift in the aggregate demand curve. Why would perceptions about whether the tax change is permanent or temporary affect the size of the shift?

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Definitions:

Combining Form

A word root used in the formation of medical and scientific terms, often with a connecting vowel to make the term easier to pronounce.

Vowel

A speech sound produced by comparatively open configuration of the vocal tract, with vibration of the vocal cords but without audible friction.

French

A Romance language originating from France and spoken in many countries around the world.

Medical Terms

Specific words or phrases used in medicine to describe precise conditions, procedures, anatomical parts, or equipment.