Effect on equilibrium real gdp
Suppose that Congress enacts a lump-sum tax cut of $750 billion. The marginal propensity to consume is equal to 0.75. Assuming that Ricardian equivalence holds true, what is the effect on equilibrium real GDP? On saving?
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Demand for discount tickets is unlimited, while demand for full-fare tickets is evenly distributed between 11 and 30 seats. How many seats should be protected for full-fare passengers?
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