Question
Consider the general government budget constraint. Suppose the government increases taxes in the current period by g but does not change taxes in the current
Consider the general government budget constraint. Suppose the government increases taxes in the current period by g but does not change taxes in the current or future periods. Then the additional government expenditures would have to be funded by:
(a) either raising seignorage by g in the current period or g in the future period.
(b) either raising seignorage by g in the current period or rg in the future period.
(c) either raising seignorage by rg in the current period or g in the future period. (d) either raising seignorage by g in the current period or g in the future period.
r
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