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Define the macroeconomic stability in market for promoting development.
Macroeconomic stability implies that:
• Tight fiscal policy that is balanced government budgets and decreased health and also education budgets. Public sector employees may be made jobless to make sure G=T
• Tight monetary policy to attain low inflation that raises the costs of borrowing to firms.
Consider a market for a good where there is a per unit tax set at t cents per unit sold, where the demand curve slopes downward and where supply is perfectly inelastic. Suppose the
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