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(2marks) 2. In the long run, what happens to consumption, investment, and the interest rate when the government increases taxes in a closed economy? (9marks)

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(2marks) 2. In the long run, what happens to consumption, investment, and the interest rate when the government increases taxes in a closed economy? (9marks) 3. If inflation rises from 10 to 14 percent, explain what happens to real and nominal interest rates according to the Fisher effect? (4marks)

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