Y is real domestic output; ii) E is exchange rate in domestic currency/foreign currency terms, iii) if a government maintains a balanced budget, this implies that total government expenditure G is financed from government taxes T. G > T implies there is a government budget deficit. Assume that there is no law that requires the government to maintain a balanced budget at all times. Assume further that the government cuts taxes temporarily which leads to a budget deficit.

what is the overall effect on Y and E in the short run if there is only a temporary decrease in taxes without the expectation that the government will monetize the debt in the future? (Can be used to explain with the help of the DD-AA model)