(by a balanced budget amendment) from spending any more; thus G = t×Y, where t is the tax
a. Explain why government spending is endogenous in the model.
b. Is the multiplier larger or smaller than the case in which government spending is
c. When t increases, does Y increase, decrease, or stay the same?
This question was asked on Jan 26, 2013 and answered on Jan 26, 2013.
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