Country A and Country B are identical in every respect except that Country B has a higher income tax rate than Country A. In both countries, the government increases spending by $100. In which country will the overall GDP increase more? Explain how you arrive at the answer.

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The Answer of Country A and Country B are identical in every respect except that Country B has a higher income tax rate than Country A. In both countries, the government increases spending by $100. In which country will the overall GDP increase more? Explain how you arrive at the answer.

Country a and Country B Are Identical in Every Respect