1. Assume that the Bangladesh government implements a tax cut in response to the Covid-19

outbreak. Explain how tax cuts can impact both aggregate demand and aggregate supply. Give an

example of each.

2. Assume that depositors start withdrawing money in unprecedented amounts from their bank

account during the Covid-19 pandemic. Also, suppose that very few people are depositing money

into their accounts. Describe the process by which this will affect the money supply in the

economy.