Assume that the Federal Reserve Board has decided to maintain the level of real GDP at the

Question:

Assume that the Federal Reserve Board has decided to maintain the level of real GDP at the current level. If Congress passes a $50 billion decrease in personal taxes, what action, if any, would the Fed have to take? Describe the effect of the actions of Congress and the
Fed on:
(a) The interest rate
(b) The composition of output
(c) The future growth rate of the GDP