4. In the IS-LM model, we have following equations:
IS: Y=C(Y-T)+I(r)+G,
LM: M/P = L(r, Y).
申論題內容
(2) Consider a decrease in taxes of △T. What the magnitude of the level of income is raised at any given interest rate. (3%) Please illustrate the two equations of IS and LM on a graph to show the impact on the interest rate and income by new taxes policy. (3%)
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