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i need fast answers please Question 2 In the February 24, 2003 edition of Business Week, Robert J. Barro discusses President Bush's proposed tax cuts:

i need fast answers please

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Question 2 In the February 24, 2003 edition of Business Week, Robert J. Barro discusses President Bush's proposed tax cuts: "One attraction of tax cuts and deficits is that they starve the government of revenue and thereby promote spending restraint. This worked particularly well in the 1980s. The Reagan tax reductions were a proclamation that the growth in the government had to stop-and, with something of a lag, that happened from the mid-1980s through the 1990s." For the questions below, you should assume that the proposed tax cuts are lump sum. A. Suppose first that Professor Barro's prediction is wrong: the government does not change its purchases of goods and services in response to the tax cuts. Under this scenario, how would the proposed tax cuts affect equilibrium saving/investment and the equilibrium real interest rate? You should assume that the Ricardian Equivalence Proposition is true. Graphs are useful but not necessary. B. Now suppose that Professor Barro's prediction is correct: the tax cuts force the government to reduce its future (but not current) purchases of goods and services. Under this scenario, will the tax cuts increasek or decrease the willingness of consumers to save? Briefly explain. Although it is not necessary, you can assume that consumers are forward-looking and aware of the government's budget constraint C. Using graphs, show how the savings changes you described in part (B) affect equilibrium saving/investment and the equilibrium real interest rate

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