Some people tend to use the terms effectiveness and efficiency interchangeably though we have seen they are different concepts. However, is there any relationship at all between them? Can a firm be effective but inefficient? Very efficient, but essentially ineffective? Both? Neither?

Consider an economy where the government's budget is initially balanced. the production function, consumption function and investment function can be represented as follows y equals k to the power of alpha l to the power of 1 minus alpha end exponent c equals c subscript 0 plus b left parenthesis y minus t right parenthesis i equals i subscript 0 minus d r suppose that taxes increase. what happens to the equilibrium level of output?