Business, 26.06.2019 18:20 kmafromhannah2905

If the ricardian equivalence theorem is not relevant, then an income-tax-rate cut a. will result in a multiple times higher increase in equilibrium real gdp in the long run; however, a tax-rate reduction will increase the automatic-stabilizer properties of the tax system, so equilibrium real gdp would be more stable. b. will result in a multiple times higher decrease in equilibrium real gdp in the long run, however; a tax-rate reduction will reduce the automatic-stabilizer properties of the tax system, so equilibrium real gdp would be more stable. c. will result in a multiple times higher increase in equilibrium real gdp in the short run; however, a tax-rate reduction will reduce the automatic-stabilizer properties of the tax system, so equilibrium real gdp would be less stable. d. will result in a multiple times higher decrease in equilibrium real gdp in the short run; however, a tax-rate reduction will increase the automatic-stabilizer properties of the tax system, so equilibrium real gdp would be less stable.

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If the ricardian equivalence theorem is not relevant, then an income-tax-rate cut a. will result in...

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