2 Using the same analytical techniques as those developed in this chapter, develop a diagrammatic analysis of
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2 Using the same analytical techniques as those developed in this chapter, develop a diagrammatic analysis of a matching grant with a maximum amount available. (Hint:
when the maximum is reached, the rest of the budget line becomes vertical or horizontal.)
How are the effects different from those of a simple matching grant? Does it depend on the size of the maximum? The shape/position of the indifference map? Are there circumstances in which the ceiling on available funds might have no effect on the mix of services provided?
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