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Macroeconomics 12th Edition by Rudiger Dornbusch, Stanley Fischer ,Richard Startz
Edition 12ISBN: 978-1259070969Macroeconomics 12th Edition by Rudiger Dornbusch, Stanley Fischer ,Richard Startz
Edition 12ISBN: 978-1259070969 Exercise 5
Suppose the government cuts income taxes. Show in the IS-LM model the impact of the tax cut under two assumptions: (1) The government keeps interest rates constant through an accommodating monetary policy. (2) The money stock remains unchanged. Explain the difference in results.
Explanation
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IS curve showing inverse relation betwee...
Macroeconomics 12th Edition by Rudiger Dornbusch, Stanley Fischer ,Richard Startz
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