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QUESTION
Given that the consumption function is C = c0 + c1(Y ! T), investmentis fixed, government spending is exogenous.
Given that the consumption function is C = c0 + c1(Y ! T), investmentis fixed, government spending is exogenous.•
a. First, explain the equilibrium output in algebra, and please show thisequilibrium in graph, and use words to explain.•
b. Second, if the taxes level decreased, how will it affect the equilibrium?Please show this in graph, and use words to explain this process.•
c. What is a multiplier effect? How can you show the multiplier effect in this question?
** just short answer questions. do not need an essay for it
Given that the consumption function is C = c0 + c1(Y ! T), investmentis fixed, government spending isexogenous.•a. First, explain the equilibrium output in algebra, and please show this...