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Economics

Suppose that Congress passes a constitutional amendment requiring the U.S. government to maintain a balanced budget at all times. Thus, if the government wishes to change government spending, it must always change taxes by the same amount, that is "G = "T. Does the constitutional amendment imply that the government can no longer use fiscal policy to affect employment and output?

(Hint: analyze a “balanced budget” increase in G, one that is accompanied by an equal tax hike).

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91299358

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