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Graphically Illustrate the Traditional View of the Long-Run Impacts of a Debt-Financed

Question 47

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Graphically illustrate the traditional view of the long-run impacts of a debt-financed tax cut on:
a. saving, investment, and real interest rate using the classical model (Chapter 3), and b. steady-state capital per worker and output per worker using the Solow growth model.

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blured image Graph (A) shows that in the long run th...

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