Respuesta :
In an effort to avoid recession, the government implements a tax rebate program, effectively cutting taxes for households. We would expect this to increase aggregate demand.
One of the most terrifying phrases in economics is "recession." The loss of a job or source of income may have an ongoing effect on a person's life.People are able to keep more of their money when tax rates are reduced. The owners of the policies hope that some of the new, disposable income will be spent.
Additionally, firms are likely to boost production of goods and services if consumers spend more money on them. Businesses will probably order more equipment and raw supplies as output rises, hire more employees, and ask present employees to put in greater hours.
Policymakers anticipate that as new and existing workers earn more money, they will spend part of it on products and services, starting a chain reaction that will help the economy grow. More production results from increased expenditure, and this cycle repeats again.
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