Figure 10-2

-Refer to Figure 10-2.If the economy is currently at a full-employment equilibrium and there is an increase in tax revenue,what will the short-run equilibrium be?

Question

Figure 10-2
 
-Refer to Figure 10-2.If the economy is currently at a full-employment equilibrium and there is an increase in tax revenue,what will the short-run equilibrium be?

Quizplus · Accepted Answer

An increase in tax revenue will shift the aggregate demand curve to the left, resulting in a decrease in output and a movement to a new short-run equilibrium at E3.

Figure 10-2 -Refer to Figure 10-2.If the Economy Is Currently at a Is