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2. Consider a Keynesian IS-LM model for national income: IS: Y = C(Y - T) + I(r)+G LM: L ( r , Y ) =
2. Consider a Keynesian IS-LM model for national income: IS: Y = C(Y - T) + I(r)+G LM: L ( r , Y ) = Ms where we consider Y and r as the endogenous variables and G, MS, and T as the exogenous variables. (a) (10) Find the effect of a lump-sum tax, T, change on Y, i.e., OY/OT, using the implicit function theorem. (b) (10) Find the effect of a lump-sum tax, T, change on r, i.e., Or/OT, using the implicit function theorem
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