The U.S. economy is in both short-run and long-run equilibrium, as shown in the graph below. Assume the federal government decides to decrease personal income taxes. a. Show the effect on the short-run equilibrium as a result of the decrease in taxes. Using the graph, draw either the new AD curve or new AS curve resulting from this change. Instructions: Use the tool provided "New Curve" to plot the appropriate line. After placing the curve, click on "Select" and choose whether to label the curve "AD1" or "AS1" from the dropdown menu
The U.S. economy is in both short-run and long-run equilibrium, as shown in the graph below. Assume the federal government decides to decrease personal income taxes. a. Show the effect on the short-run equilibrium as a result of the decrease in taxes. Using the graph, draw either the new AD curve or new AS curve resulting from this change. Instructions: Use the tool provided "New Curve" to plot the appropriate line. After placing the curve, click on "Select" and choose whether to label the curve "AD1" or "AS1" from the dropdown menu
Chapter19: Measuring Economic Performance
Section: Chapter Questions
Problem 12P
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The U.S. economy is in both short-run and long-run equilibrium, as shown in the graph below. Assume the federal government decides to decrease personal income taxes.
a. Show the effect on the short-run equilibrium as a result of the decrease in taxes. Using the graph, draw either the new AD curve or new AS curve resulting from this change.
Instructions: Use the tool provided "New Curve" to plot the appropriate line. After placing the curve, click on "Select" and choose whether to label the curve "AD1" or "AS1" from the dropdown menu.
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