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Business, 23.04.2021 23:50 j015

In the simplified model with proportional taxation there can be two competitive equilibria, one with a high tax rate and one with a low tax rate. Now, suppose that government spending, G, increases. Determine the effects of an increase in G on consumption, leisure, labor supply, real output, and the tax rate in the high-tax-rate equilibrium and the low-tax-rate equilibrium. How do your results differ

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