Economics question check picture Image text transcribed for accessibility: 4. Consider the simple mo

Economics question check picture
Image text transcribed for accessibility: 4. Consider the simple models of goods/services market (with government: AE= C + I + G) and the money market. Suppose that the government is considering to carry out the following policy mix: To increase taxes and sell securities in open market. Let’s look at the markets separately in questions(a) and(b). What is the effect of higher taxes on the goods/services market? Show the changes on the AE-Y graph and discuss them: What would be the effect of selling securities on the money market? Show the changes on the following graph and discuss them:

 

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