Question 1 a new york times editorialist recently advocated, Ask an Expert

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Question: 1. A New York Times editorialist recently advocated a cut in the payroll tax. Among other advantages. he argued that it would "stimulate hiring. since employers shoulder half the burden of the tax" [Cooley, 2004]. Sketch a model that is consistent with this argument. Is it realistic?

2. Use a general equilibrium framework to discuss the possible incidence of a tax on cigarettes.

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