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Unformatted text preview: a bigger piece of the pie, but at the same time he pie is becoming smaller because people are not going to want to hold as much money as before. It is possible that your pie becomes so small that your revenue actually goes down. Figure 2: Laffer Curve The more severe limit to , as Z increases, individuals in the economy do not want to hold as much money. Decrease in (y-c1t) decrease in total demand for Nt(y-c1t0 decrease value of money vt = decrease vtMt (seignorage tax base)...
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This note was uploaded on 04/17/2010 for the course ECON 2450 taught by Professor Tasso during the Spring '09 term at York University.
- Spring '09