Permanent tax increase in the economic fluctuations model

Reference no: EM13697377

Consider a permanent tax increase in the economic fluctuations model beginning from potential output prior to the tax increase. In the long run, as a result of the tax increase,

A. investment increases

B. government spending is unaffected

C. consumption decreases

D. net exports increase

E. All of the above

Reference no: EM13697377

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