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. the tax cut will have a smaller impact on aggregate demand in the economy with the a) higher sensitivity to changes in the interest rate, or b) lower sensitivity to changes in the interest rate

b) lower sensitivity to changes in the interest rate

Explanation:

The tax cut is a renunciation that the government makes so that the money that would be collected is used by society. However, consumption and investment, which are components of aggregate demand, depend on other factors.

The interest rate is considered the price of money since it is the remunerative factor. With money in hand, economic agents decide whether to invest money in the productive sector (consumption and investment) or in the financial sector - to earn interest. Thus, those most sensitive to changes in interest rates tend to invest money in the financial sector.

i this its 7 years i hope this

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.