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Using general-equilibrium analysis in the context of a small open-economy producing two goods (importable and exportable), argue that a tax on imports is equivalent to
Using general-equilibrium analysis in the context of a small open-economy producing two goods (importable and exportable), argue that a tax on imports is equivalent to a tax on exports (Lerner Symmetry theorem). Hint: Consider the effect that the two policies (import tax and export tax) have on relative prices
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