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Discuss the effects of an increase in taxes diagrams

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Reference no: EM132601164

Using the IS-LM-PC model for a closed economy, discuss the effects of an increase in taxes diagrams put in place to reduce the government deficit, a) in the short run and b) in the medium run with a central bank policy rate adjustment. Your discussion should be make explicit reference to that illustrate adjustment dynamics.

Reference no: EM132601164

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