Refer to the information provided in Figure 24.5 below to answer the question(s) that follow. Figure 24.5
-Refer to Figure 24.5. If the economy is in equilibrium and the government increases taxes by $50 billion, equilibrium aggregate output ________ to $________ billion.

Question

Refer to the information provided in Figure 24.5 below to answer the question(s) that follow.  Figure 24.5
-Refer to Figure 24.5. If the economy is in equilibrium and the government increases taxes by $50 billion, equilibrium aggregate output ________ to $________ billion.

Quizplus · Accepted Answer

A tax increase reduces disposable income, causing a decrease in consumption and a shift in the AE curve downward. This results in a decrease in equilibrium output to $1,450 billion.

Refer to the Information Provided in Figure 24