3. Illustrate graphically and explain in detail.

a. In the IS-LM model, will a tax cut change the money supply in the economy? Does a change in the money supply shift the IS or the LM curve? Does a tax cut shift the IS or the LM curve?

b. Can you explain how the initial corporate income tax cuts can also have positive effects on the wages of workers? How should you model this indirect effect in the IS-LM model?