The following graph shows the aggregate demand curve.
Suppose the governments of two different economies, economy J and economy K, implement a tax cut of the same size. The tax cut in economy J is permanent, while the tax cut in economy K is temporary. The economies are identical in all other respects.
The tax cut will have a larger impact on aggregate demand in the economy with the (temporary tax cut or permanent tax cut)
The following graph shows the aggregate demand curve. Suppose the governments of two different economies, economy...