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Business, 06.05.2020 02:20 gracie0818

Consider an economy existing for four periods following the government budget constraint as follows:

Bt+1 = (1 + i)Bt + Gt - Tt)

The Australian government is trying to decrease the country’s stock of debt. Using the equation above, discuss two possible ways this could be achieved using fiscal policy, only. What challenges do you anticipate? (Hint: think of how tax collections change given changes to government spending).

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