Graphically illustrate the traditional view of the short-run impacts of a debt-financed tax cut on:

a. interest rates and output in a closed economy in the short run, using the $L S - L M$ model.
b. exchange rates and output in a small open economy with a flexible exchange rate in the short tun, using the Mundell-Fleming model.

Question

Graphically illustrate the traditional view of the short-run impacts of a debt-financed tax cut on:

a. interest rates and output in a closed economy in the short run, using the $L S - L M$ model.
b. exchange rates and output in a small open economy with a flexible exchange rate in the short tun, using the Mundell-Fleming model.

Quizplus · Accepted Answer

The Answer of Graphically illustrate the traditional view of the short-run impacts of a debt-financed tax cut on:

a. interest rates and output in a closed economy in the short run, using the $L S - L M$ model.
b. exchange rates and output in a small open economy with a flexible exchange rate in the short tun, using the Mundell-Fleming model.

Graphically Illustrate the Traditional View of the Short-Run Impacts of a Debt-Financed