Difference between output change in the IS-LM curve & Keynes Cross Diagram (45 degree diagram)?

Question

How and why might a reduction in tax DIFFERENTLY affect output in the IS-LM curve vs a Keynes Cross Diagram?

Answer 1

It's because of "crowding-out" effect which is taken into account in IS-LM model and ignored in simpler model - Keynesian cross. It is effect on increase/decrease in interest rates, thus less/more investment becomes profitable and consequently total investment falls (in IS-LM model, thus multiplier is less).