Question: On average, does an increase in taxes raise or lower real GDP? If taxes as a percent of GDP go up 1 percent, by how

On average, does an increase in taxes raise or lower real GDP? If taxes as a percent of GDP go up 1 percent, by how much does real GDP change? Are the decreases in real GDP caused by tax increases temporary or permanent? Does the intention of a tax increase matter?

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C Romer and D Romer show that tax increases reduce real GDP On average a 1 percent ... View full answer

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