Within the classical model, suppose that there is a lump-sum increase in taxes, for example, $5 per person. Explain and illustrate (ie draw graphs that show) the effects of such a tax increase on each of the following (this does not mean you need a graph for each, but that there are a set of graphs that will show what happens to each of these variables) a.output b.the price level c. the rate of interest d. saving e. consumption f.investment spending
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