nullConsider a one-period economy with a single representative consumer, a sin- gle representative firmn and the government. The representative consimer derives utility from consumption c and leisure I: u(c.l)= Inc ln The firm produces output Y using capital K and labor N according to consummer. Y=zKeNl-a (2) (3) parameter. where is the total factor productivity and a is the Cobb-Douglas The firmn maximizes profits which are then transferred to the representative The government balances the budget using lump-sum taXes T on the repre- sentative consumer to finance government spending G. The hourly wage in this economy is w and the consumer has h hours to divide between leisure and labor