Announced that they were going to reduce the income tax

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Reference no: EM131007357

Short Answer:

a) If the government announced that they were going to reduce the income tax next year, financed by finding a large and previously-unknown warehouse of real goods. What would happen to labor? To consumption?

b) If the government announced they were going to reduce the income tax next year, financed by additional borrowing, what would happen to labor? To consumption?

Reference no: EM131007357

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