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Question: In 1964 and 1965, a 20% reduction in personal and corporate income tax rates was followed by a budget surplus. In 1982 and 1983, a 20% reduction in personal and corporate income tax rates was followed by a budget deficit that rose to as much as 4% of GDP. Explain what factors caused the surplus in one case, and the deficit in the other case.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M93115121

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