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Tax Cut
A tax cut involves a reduction in the amount of taxes imposed by a government, which can affect consumer spending, investment, and economic growth.
MPC
The marginal propensity to consume (MPC) indicates the proportion of an increase in income that a consumer will spend on consumption rather than saving.
Crowding-out Effect
A situation where increased government spending leads to a reduction in private sector investment due to higher interest rates.
Aggregate Demand
The total amount of goods and services demanded in the economy at a given overall price level and in a given time period.
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