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QUESTION

If households view a tax cut as temporary, then the tax cut A. has no affect on aggregate demand. has more of an affect on aggregate demand than if...

If households view a tax cut as temporary, then the tax cut

A. has no affect on aggregate demand.

B. has more of an affect on aggregate demand than if households view it as permanent

C. has the same affect as when households view the cut as permanent.

D. has less of an affect on aggregate demand than if households view it as permanent.

Why B is not the correct answer but D is.

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