Recessions will often result in government budget deficit

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a. (True or False) An increase in income tax rates will always result in an increase in government tax revenues. (Explain)

b) (True or False) Recessions will often result in a government budget deficit. (Explain)

c) Compare the traditional view versus the view of Ricardian equivalence of the effects of a debt-financed tax cut on:

i) Current Consumption ii) Current National Savings iii) Current Interest rates

Reference no: EM131378481

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