Other things being equal, a reduction in taxes will

A) lead to a corresponding reduction in interest rates increasing the crowding out effect.
B) influence the short run aggregate supply curve but not the aggregate demand curve.
C) cause an increase in aggregate demand due to increases in consumption, investment, or net exports.
D) lead to a reduction in the long run aggregate supply curve as businesses enjoy greater profits.

C

Economics

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Since 1970, real GDP ___ in most years.

A. fell B. stayed the same C. rose

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A reduction in tax rates may result in a short-term reduction in government revenues, but it will also leave people with more disposable income.

a. true b. false

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