The forward-looking model implies that the Keynesian multiplier is greater for a temporary tax cut than a permanent tax cut.

Name: The forward-looking model implies that the Keynesian multiplier is greater for a temporary tax cut than a permanent tax cut.
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The Keynesian multiplier is generally greater for a permanent tax cut because it leads to a sustained increase in disposable income, encouraging more consumption over time compared to a temporary tax cut.

The Forward-Looking Model Implies That the Keynesian Multiplier Is Greater