Analyze the effects of a decrease in taxes from T 0 to T 1 in the monetarist framework. In your answer, be sure to take account of the financing of the deficit that results from the tax cut. How are...

Analyze the effects of a decrease in taxes from T₀
to T₁
in the monetarist framework. In your answer, be sure to take account of the financing of the deficit that results from the tax cut. How are the equilibrium levels of income and the interest rate affected by the tax cut?