The AD-AS model can be used to analyze the effects of fiscal policy, including changes in government spending or taxes. Suppose Congress votes to decrease corporate income tax rates. Use the AD/AS model to analyze the likely impact of the tax cuts on the macroeconomy. Show graphically and explain your reasoning for both Keynesian and Neoclassical perspectives. What exactly causes AD and/or AS to shift? What happens to GDP and the aggregate price level? Why?
Rubric
Criteria Not Evident Developing Proficient Distinguished Weight
Explain the Keynesian perspective on tax cuts and show graphically. 4
Explain the Neoclassical Perspective on tax cuts and show graphically. 4
Explain the effect of tax cuts on GDP. Show graphically. 4
Explain the effect of tax cuts on the price level. Show graphically. 4
Write up your analysis using correct language, explaining all your work. 4
also if you get this instructions please write in your own words my professor is very strict and won’t take too much internet source.
