Use Cramer's rule to see how the equilibrium Y and r are affected by the tax rate t. Consider the following more elaborate linear IS-LM. K a) Y = C+I+G C = Co + CI ( Y - T) - C2 2 1 = 10 + agY - ar e) Ms = my + Mo - hr. Substitute c into b to obtain b'; then substitute b' and d into a to get the new IS-curve. Combine this with e and use Cramer's rule to solve this system for Y and r in terms of the exogenous variables. Show that an increase in G or a reduction of to or , will increase Y; in macroeconomic terms, Keynesian fiscal policy "works" in this model. Show that these changes also increase r. Regarding monetary policy, show that an increase in M, increases Y and lowers r