Problem
Suppose the government cuts income taxes. Show in the IS-LM model the impact of the tax cut under two assumptions:
(a) The government keeps interest rates constant through an accommodating monetary policy.
(b) The money stock remains unchanged. Explain the difference in results.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.