Question

Suppose the governments of two different economies, economy a and economy b, implement a permanent tax cut of the same size. Investment spending in economy a is less sensitive to changes in the interest rate than investment spending in economy

b. The economies are identical in all other respects.

Answer 1

Answer:

the governments of two different economies, economy a and economy b, implement a permanent tax cut of the same size. Investment spending in economy a is less sensitive to changes in the interest rate than investment