1. Refer to the first equilibrium income you calculated in problem 4. Now suppose that the intercept of the net tax function ( t0 ) changes from -50 to -40. Find the new level of equilibrium income....

1. Refer to the first equilibrium income you calculated in problem 4. Now suppose that the intercept of the net tax function ( t₀
) changes from -50 to -40. Find the new level of equilibrium income.

2. Compare Keynesian and supply-side economists’ positions on the effects of reduction in the income tax rate.