Question: True, False, or Uncertain to the statement below. Justify your answer in a few sentences. In the dynamic model with a fixed level of government
True, False, or Uncertain to the statement below. Justify your answer in a few sentences. In the dynamic model with a fixed level of government spending and lump-sum taxation that we have studied, it is better for the government to have a balanced budget each period than to run a government deficit for at least two reasons: (1.) a balanced government budget helps to avoids a trade deficit and (2.) households are better off when the government has a balanced budget
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