Business, 30.10.2019 01:31, dtykara

The new classical model implies that substitution of debt for tax financinga. increases aggregate demand and exerts an expansionary effect on real output. b. is highly effective against inflation. c. reduces savings because it increases both the current and future tax liability of households. d. leaves wealth, and therefore aggregate demand, unchanged because the debt will require higher future tax rates.

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The new classical model implies that substitution of debt for tax financinga. increases aggregate de...