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(d) Does an increase in t make the IS curve flatter or steeper? Would you des with v > 0 as having automatic stabilisers on
(d) Does an increase in t make the IS curve flatter or steeper? Would you des with v > 0 as having automatic stabilisers on the investment side? Why? (e) After an increase in exogenous government spending, is the government sp larger or smaller in this economy relative to the one without automatic s ultimate impact on equilibrium output of this increase in government sp smaller? Why? (f) Plot the AD curve in (output, inflation) space. Does a higher w make it f Does a higher r shift it left or right? Explain the intuition
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