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Consider the following Model (notation is standard): Y = C + I + G , Y = f(n) C = c(Y-T) f(n) = W/P I

Consider the following Model (notation is standard):

Y = C + I + G , Y = f(n)

C = c(Y-T) f(n) = W/P

I = i(r) n = h(W/P)

Md= Ms=M Md/P = L(Y, r)

Calculate the effects of a change in T (TAXES) on

C(Consumption), I(investment), r(interest rate), Y (Output), and P(Price).

Please, illustrate your findings graphically. And interpret them.

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