Suppose there is a Fed purchase of bonds and simultaneous tax cut.We know with certainty that this combination of policies must cause

Name: Suppose there is a Fed purchase of bonds and simultaneous tax cut.We know with certainty that this combination of policies must cause
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A Fed purchase of bonds typically lowers interest rates, increasing investment and consumption, while a tax cut increases disposable income, boosting consumption. Both policies stimulate demand, leading to an increase in output (Y).

Suppose There Is a Fed Purchase of Bonds and Simultaneous