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Illustrate and Explain the Effects of Tax Reduction and Simplification

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Essay

Illustrate and explain the effects of tax reduction and simplification using the dynamic aggregate demand and supply model.To simplify the analysis,assume that aggregate demand is not affected by the tax cut.


Definitions:

Scientific Method

a systematic approach to research and experiment that involves observation, hypothesis formation, experimentation, and the analysis of data to reach conclusions.

Testable Hypothesis

A statement that makes a specific prediction that can be verified or falsified through experimentation or observation.

Research Method

The systematic approach, technique, or way of planning and conducting scientific investigations in any given field of study.

Scientific Theories

Well-substantiated explanations of some aspect of the natural world, based on a body of facts that have been repeatedly confirmed through observation and experiment.

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