Question: 1. Why do you suppose that uncertainty about tax rates is a key element of Baker, Bloom, and Davis's policy-uncertainty index? 2. Why might it

1. Why do you suppose that uncertainty about tax rates is a key element of Baker, Bloom, and Davis's policy-uncertainty index?
2. Why might it be the case that even if distorted beliefs alter real GDP and the unemployment rate today, such beliefs might be unlikely to arise among households and firms again in the future? Explain your reasoning.

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