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Business, 28.02.2021 17:00 boi7348

Consider the following information: c is the consumption profile, w is the wage or labor earnings profile, and line a-a is the initial wage profile. Suppose there is an announced change in tax policy of a tax cut, area c, and a tax increase later, area d. What is the impact of this policy on consumption if the change in policy is believed by the consumer at the beginning of their planning horizon?

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