Pontotoc, Mississippi. Pontotoc is a city in, and the county seat of, Pontotoc County, Mississippi, located to the west of the much larger city of Tupelo. The population was 5,625 at the 2010 census.[1]
Changes in Taxes. The two instruments of fiscal policy are government spending and taxation. A tax increase depresses consumer spending and shifts the aggregate demand curve to the left. A tax cut shifts the aggregate demand curve to the right.The size of these shifts are affected by the multiplier and crowding out effects too, but there is another factor which is important. If households perceive that the tax cut is temporary, it will have a very small impact on aggregate demand.hanges in Taxes. The two instruments of fiscal policy are government spending and taxation. A tax increase depresses consumer spending and shifts the aggregate demand curve to the left. A tax cut shifts the aggregate demand curve to the right.
To use the graph, change either government spending, tax levels, or both by dragging the sliders located to the right of the graph. The aggregate demand curve will shift to the left or the right, reflecting the change in spending induced by the change in policy.In either case, the magnitude of the demand shift depicted is a multiple of the change in spending or taxes, where the tax multiplier is somewhat smaller than the spending multiplier.he graph shows the aggregate demand curve and short-run aggregate supply curve for a hypothetical economy. The AD curve shows an inverse relationship between the aggregate price level and quantity of real GDP demanded.