If citizens were to decide that the overall federal tax rate should not be greater than 18 percent, what must happen to the long-term rate of federal expenditures in relation to national income?
THIS IS WHAT I THINK THE ANSWER IS... AM I CORRECT? AND CAN YOU PLEASE ADD MORE TO IT
If citizens do not want the overall tax rate to rise above 18%, the federal government, in the long term, cannot spend or borrow above 18%. With this government budget constraint, the government will spend dollar for dollar what comes in as revenue from taxpayers. They can use this money to begin paying off the debts from borrowing.
If citizens were to decide that the overall federal tax rate should not be greater than 18 percent, what must happen to the long-term rate of federal expenditures in relation to national income?
THIS IS WHAT I THINK THE ANSWER IS... AM I CORRECT? AND CAN YOU PLEASE ADD MORE TO IT
If citizens do not want the overall tax rate to rise above 18%, the federal government, in the long term, cannot spend or borrow above 18%. With this government budget constraint, the government will spend dollar for dollar what comes in as revenue from taxpayers. They can use this money to begin paying off the debts from borrowing.
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