HANDS-ON MODELING: How Governments Spend Taxes
View and complete this activity in Module 6 - the UNI-CGE Model
1. Experiment: How Should the Government Spend Your Taxes?
The government’s decision on how to spend tax
revenue is described in the UNI-CGE model by the government closure rule. This
model exercise explores how the same tax increase affects the economy differently
under three government closure options: a fixed government budget, fixed government spending, and a tax replacement scheme.