What would be overall impact on ad of the policy


Assume that Federal Government announced a tax rebate of $500 for all the individuals filing singly and $1000 for all families filing jointly or as head of household in upcoming tax year. Further, suppose that Government budget included a broad based reduction in Government spending on goods and services, whose total amount was equal to total amount of the tax rebates. What would be overall impact on AD of these policy changes or would policy change effects completely cancel each other out?

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Macroeconomics: What would be overall impact on ad of the policy
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