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First I would not call this problem a circular problem as that term has specific meaning in modeling and it does not really apply here. Rather you can think about this as a version of a multiplier. For example, consider standard concept of money multiplier. In fractional reserve system if a central bank issues 100€ and reserve ratio is 10% then the original ...


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Yes, both presents higher fiscal risks up to the future, as they imply in a higher Federal deficit. The hability to adjust depends, unfortunately, not only on the program itself, but in a political risk as the congress could refuse to reduce the revenue to these programs as this would be not appealing for voters. At least USA does not have something like "...


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In the slide, we're given the marginal utility (or the derivative of the utility function) as $m(x) = x^{-b}$. The utility function whose derivative is $m(x)$ is \begin{eqnarray*} u(x) = \int m(x) dx = \int x^{-b} dx = \begin{cases} \frac{1}{1- b} x^{1-b} & \text{when } b \neq 1 \\ \ln x & \text{when } b = 1 \end{cases} \end{eqnarray*} Verify ...


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