1. Two goods, Police and AOG. Assume prices are 1. Budget is 1000. The city receives a categorical grant of 500 for police services. Show a situation where taxes are reduced and police services remain unchanged. This is called_

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1. Two goods, Police and AOG. Assume prices are 1. Budget is 1000. The city receives a
categorical grant of 500 for police services. Show a situation where taxes are reduced and
police services remain unchanged. This is called_
2. Two goods, police and fire. Assume prices are 1. Budget is 2000. The city receives a 1:1
matching grant for police services. Show a situation where fire and police spending are
increased.
Transcribed Image Text:1. Two goods, Police and AOG. Assume prices are 1. Budget is 1000. The city receives a categorical grant of 500 for police services. Show a situation where taxes are reduced and police services remain unchanged. This is called_ 2. Two goods, police and fire. Assume prices are 1. Budget is 2000. The city receives a 1:1 matching grant for police services. Show a situation where fire and police spending are increased.
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