Problem
Suppose the capital gains tax rate were cut from 20% to 15%, which boosted the stock market by 5%. Assuming that 20% of the additional gains were realized, calculate the change in capital gains tax receipts under static ex ante assumptions. Now suppose a 5% boost in the stock market raised real GDP by ½%. Calculate the ex post change in the Federal budget position.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.