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a) Explain why a higher marginal tax rate reduces the size of the government expenditure multiplier.
b) Suppose government increases autonomous taxes and defence expenditure by the same amount. Will real GDP increase in the short run? Why?
Macroeconomics, Economics
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Assignment 1: This assignment will enable you to apply the determinants of supply and demand, market equilibrium, and price elasticity for a product This assignment will cover the following course outcomes: Describe and ...
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