Thursday, October 24, 2013

The ad curve

George Bush sr. promised while running for President, "Read my lips. No new taxes". What really happened was that he passed taxes that Congress wanted and the AD curve. Because of the new taxes, people had less money to spend and then the aggregate demand curve shifted to the left. So by having the aggregate dreamland curve shift to the left from the new taxes passed George Bush was not re-elected. The change in the curve had real GDP decrease.

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