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    Macroeconomics Study Set 43
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    Exam 11: A: The Aggregate Expenditures Model
  5. Question
    Why Does the Inclusion of a Lump-Sum Tax Cause Domestic
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Why Does the Inclusion of a Lump-Sum Tax Cause Domestic

Question 25

Question 25

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Why does the inclusion of a lump-sum tax cause domestic consumption to fall initially by an amount less than the tax?

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When a lump-sum tax is imposed, disposab...

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