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Macroeconomics 13th Edition by William Baumol ,Alan Blinder
Edition 13ISBN: 978-1305280601Macroeconomics 13th Edition by William Baumol ,Alan Blinder
Edition 13ISBN: 978-1305280601 Exercise 8
( More difficult ) Suppose real GDP is $10,000 billion and the basic expenditure multiplier is two. If two tax changes are made at the same time:
a. fixed taxes are raised by $100 billion,
b. the income-tax rate is reduced from 20 percent to 18 percent, will equilibrium GDP on the demand side rise or fall
a. fixed taxes are raised by $100 billion,
b. the income-tax rate is reduced from 20 percent to 18 percent, will equilibrium GDP on the demand side rise or fall
Explanation
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It is given that an economy's real GDP i...
Macroeconomics 13th Edition by William Baumol ,Alan Blinder
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