Macroeconomics 11th Edition by Michael Parkin

تمرين 8

Use the following news clip and fact to work the Problem
Senate Approves Obama Tax Cut Plan
The U.S. Senate has passed legislation extending Bush-era tax cuts for middle-class Americans earning up to $250,000 per year.
Fact : Middle and low-income earners spend almost all their disposable incomes. High-income earners save a significant part of their disposable incomes.
What would have a larger effect on aggregate demand: extending the Bush-era tax cuts to everyone; extending them for middle-class only; or extending them for high-income earners onlyHow would each alternative compare with no tax cuts but an equivalent increase in government expenditure?