Which of the congressmens views better fits the model

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Reference no: EM131103586

A tax cut has just been announced. Congressman Growth states that its effect will be on the supply side, Congress Stable states that its effect will be on the demand side.

1. Demonstrate graphically the effect of the tax cut on the price level and output in the standard AS/AD model- please (graph and explain)

2. Which of the congressmen's views better fits the model?

3. Demonstrate graphically the effect of the tax cut on the price level and output if the other congressman is correct?- Please(graph and explain )

4. In the short run, which of the two congressmen is more likely correct?

5. How might the existence of significant crowding out change your answer to #4?

Reference no: EM131103586

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