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Assume that the national government wants to switch from a surplus to a deficit and they do this by lowering taxes - but they maintain spending.

 

What impact does this have on GDP (nominal), employment, Wage (real), and investment?

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Well in regards to money and applying this to LoTC it would basically mean you borrow something from someone or someone gives you something to help you out without asking for anything in return. That is if you do not want to do anything to screw up the economy. If you wanted to you could lower income for the lower income class, but they would get mad and probably flock over to a group that did a better job than you.

 

Just let me know if you want a real world perspective on this question.

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I was asking since this wasn't in an off-topic forum section, apologizes. 

 

As far as real world factors, it's way more complex and I am not knowledgable enough to go into detail. Though if they did such actions I would assume the value of their currency would drop among other things.

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 GDP (nominal) go up,  employment assuming nothing else changes it would stay the same, Wage (real) increase? Taxes go down which would be an incentive for business to increase wages, and investment? eh Idk about that I start micro economics in two weeks. 

DoNt MaKe FuN oF mE

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