Question
Consider an economy, which can be described by a 2-period intertemporal model. Factor in government spending. Suppose that the government spending in the first period
Consider an economy, which can be described by a 2-period intertemporal model. Factor in government spending. Suppose that the government spending in the first period increases from G1 to G1*. What is the effect on national savings (S=Y-C-G)? Does Ricardian Equivalence hold in this case?
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Financial Accounting
Authors: C Thomas,
12th Edition
007760086X, 9780077600860
