A Tax Cut Shifts the Aggregate Demand Curve the Farthest

question 94

Multiple Choice

A tax cut shifts the aggregate demand curve the farthest if

• A)the MPC is large and if the tax cut is permanent.
• B)the MPC is large and if the tax cut is temporary.
• C)the MPC is small and if the tax cut is permanent.
• D)the MPC is small and if the tax cut is temporary.

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Definitions:

Exploitation

The act of making use of resources or advantages for one's own benefit, often without regard for ethics or fairness.

Skimming Strategy

A pricing strategy in which a company charges the highest initial price that customers will pay and then gradually lowers the price to attract more price-sensitive customers.

Product Life Cycle

A concept that describes the stages a product goes through from development to withdrawal from the market, including introduction, growth, maturity, and decline.

Innovative Product

A product that introduces new features, functionality, or improvements that distinctly set it apart from previous versions or competitors.