Estimate efficient outcome, Macroeconomics

The city of Johnstown decides to build a new stadium to attract a basketball team from the city of Rosendale.  One economic advisor suggests that the stadium should be financed by a 2-year sales tax of 10%, while another advisor suggests that the stadium should be financed with a 20-year sales tax of 1%.  Assume the interest rate is zero.  Which approach will yield a more efficient outcome?  Why?

Posted Date: 3/14/2013 1:22:26 AM | Location : United States

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