Essay
Suppose that the economy is experiencing inflation and is above full employment,and the federal government implements an income tax increase as a corrective action.Use the IS-MP model to analyze the effect the tax increase should have on real GDP and the output gap.Show any shifts in the IS curve and the MP curve,and identify the old and new equilibrium values of the output gap.
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Q32: If the economy is initially in short-run
Q33: Figure 10.7<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB4177/.jpg" alt="Figure 10.7
Q34: Figure 10.9<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB4177/.jpg" alt="Figure 10.9
Q35: Assume the economy is initially in equilibrium
Q36: Figure 10.8<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB4177/.jpg" alt="Figure 10.8
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Q39: Figure 10.1<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB4177/.jpg" alt="Figure 10.1
Q40: Figure 10.6<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB4177/.jpg" alt="Figure 10.6
Q41: Table 10.1<br> <span class="ql-formula" data-value="\begin{array}
Q42: If the MPC = 0.75,a decrease in