“[BUY] Consider an economy that is initially at full employment level. In order to encourage innovation and entrepreneurship, suppose that the government provides tax breaks to newly formed small-medium size businesses, and subsidises investment on new technologies. Using the IS-LM-PC model for a closed economy, discuss the effects of these policy changes: a) in the short-run; and b) in the medium-run with a central bank policy rate adjustment. Your” has been added to your cart.
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