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Please solve this question : In the basic one-period model, government spending is modelled as the ac- quisition of goods by the government, with the
Please solve this question :
In the basic one-period model, government spending is modelled as the ac- quisition of goods by the government, with the government simply throwing the goods away.
(i) Is this an accurate way to capture what the government does? If so, in what ways?
(ii) If not, in what ways could we alter the model to make it capture the role of the government more accurately?
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