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Suppose that the federal budget is balanced when GDP is at potential GDP. If equilibrium GDP falls below potential, please explain how and why government
Suppose that the federal budget is balanced when GDP is at potential GDP. If equilibrium GDP falls below potential, please explain how and why government transfer payments would change; how and why tax receipts would change; how and why the budget would change.
For this assignment you will be assessed on the following criteria:
how transfer payments change
how tax receipts change
how the budget changes
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