In the example (Limited Commitment and Market Interest Rates), suppose that t < (v y')y/y'. Also

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In the example (“Limited Commitment and Market Interest Rates”), suppose that t < (v – y')y/y'. Also suppose that t falls. What effect will this have on the market real interest rate, and on consumption? Explain.

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Macroeconomics

ISBN: 978-0132991339

5th edition

Authors: Stephen d. Williamson

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Question Posted: Dec 05, 2014 09:58 AM

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In the example (Limited Commitment and Market Interest Rates), suppose that t < (v y')y/y'. Also

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In this case the currentperiod tax is sufficiently low that in equilibrium 1 ...View the full answer

Macroeconomics

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