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Question: yout tesdits lified model with proportional taxation there can be...

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yout tesdits. lified model with proportional taxation, there can be two equilibria, one with a ax rate and one with a low tax rate. Now, suppose that government spending increases. In the simp Determine the effects of an increase in G on consu and the differ? Explain why umption, leisure, labo ur supply, real output, tax rate in a high-tax equilibrium and in a low-tax equilibrium. How do your results

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