ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Consider the possibility that government spending increases productivity so that with lump sum taxes after an increase in government spending the original equilibrium level of consumption and leisure is still just affordable. (That is this point lies on the frontier of both the before and after PPFs. Be careful to make sure your drawing has this very unusual feature.) How will an increase in government spending affect consumption, hours worked, output and welfare
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