Suppose the government is imposing a debt-financed tax cut

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Reference no: EM13982328

Suppose the government is imposing a debt-financed tax cut.

A. Based on the traditional view, what will happen to:

national saving;

current consumption;

the real interest rate.

B. Based on the view of Ricardian equivalence, what will happen to:

national saving;

current consumption;

the real interest rate.

Reference no: EM13982328

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