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The three diagrams in Figure 1 represent in a simplified

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The three diagrams in Figure 1 represent in a simplified way the predictions of the three theories presented in this cha

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The three diagrams in Figure 1 represent in a simplified way the predictions of the three theories presented in this chapter about the likely effects of a major tax cut. a. Match each of the following theories with a graph: (1) Keynesian economics, (2) supply-side economics, (3) rational expectations/monetarism. Explain the logic behind the three graphs. b. Which theory do you find most convincing? Explain.

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