Tutorial 4 - Government Debt and Budget Deficits Revised

Tutorial 4 - Government Debt and Budget Deficits Revised -...

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1 Tutorial 4 Government Debt & Budget Deficits Short Answer Questions 1. According to the traditional view of government debt, how does a debt- financed tax cut affect public saving, private saving and national saving? 2. Do you believe the traditional or the Ricardian view of government debt? Why?
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Unformatted text preview: 3. Why might the level of government debt affect the government’s incentives regarding money creation? For Students to try on their own Write a short note (10 lines) on: 1. Bequest motive 2. Meaning of altruism...
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