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Graphically show the impact of a tax cut shock. Include all three markets: Labor, Product, Capital. Start with an initial steady state. Show the impact

Graphically show the impact of atax cutshock.

Include all three markets: Labor, Product, Capital.

  1. Start with an initial steady state.
  2. Show the impact of shock in the initial market.
  3. Next show the propagation mechanism--how it carries over into the other two markets.
  4. Show at least one set of the feedback loop,
  5. Show the new steady state.

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