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Eduncle posted an MCQ
October 17, 2019 • 22:35 pm 0 points
  • UGC NET
  • Economics

Assume that an economy begins in macroeconomic equilibrium, then taxes are significantly decreased. As a result of this change

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    Eduncle Best Answer

    Tax rate cuts may encourage individuals to work, save, and invest, but if the tax cuts are not financed by immediate spending cuts, they will likely also result in an increased federal budget deficit, which in the long-term will reduce national saving and raise interest rates.

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