Bob visited the offices of MASS, a successful insurance company in Boston. MASS needs people who are good with numbers. When Bob visited, he noticed that the analysts wore conservative suits and their desks were laid out in a large space like a warehouse, without cubicles, walls, or decorations. The seemed like a clue to a miserly culture.

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?