All voters in a city pay an equal marginal tax rate of $10 per mile of roads
Question:
Show how the matching grant affects the budget constraint for a typical voter. In equilibrium, the community receives $1 million per year for road paving under the matching grant program. Prove that the matching grant will be more effective in increasing road paving than a $1 million annual lump-sum grant.
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Related Book For
Public Finance A Contemporary Application of Theory to Policy
ISBN: 978-1285173955
11th edition
Authors: David N Hyman
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