Suppose the government imposes a temporary sales tax-one that is in effect for a short time, but

Question:

Suppose the government imposes a temporary sales tax-one that is in effect for a short time, but will disappear in the future. In a diagram relating current consumption to future consumption, how does your budget line shift? Which is preferable: a permanent sales tax or a temporary sales tax (assuming the rates are adjusted so they collect equivalent revenues)?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: