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If the government announced they were going to reduce the income tax temporarily next year, financed by additional borrowing, what would happen to labor? To
If the government announced they were going to reduce the income tax temporarily next year, financed by additional borrowing, what would happen to labor? To consumption? What would happen to consumption, saving, and work if the government borrowed money to buy goods households would have purchased for themselves? (For instance, it bought a bunch of bags of Cheetos that it then gave to households, who were planning on buying them anyway, before the tax)
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