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Economics

The Ricardian Equivalence theorem (a) State the Ricardian equivalence result. (b) Now suppose that there are credit market imperfections so that the lending rate (r1) is smaller than the borrowing rate (r2): r2 > r1. Explain and graphically illustrate why lower taxes in the current period but higher taxes in the future may make some consumers better off.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9441362

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