12)Initially, an economy isin long-run equilibrium with a real GDPof $4 trillion.

Suppose that increases in marginal tax rates on wages reduce the supply of labor.

1.)Using the line drawingtool,show the effect on the economy. Properly label your new line.

2.)Usingthe point drawingtool,show the new equilibrium price level and output. Label thepointE2.

Carefully follow theinstructions above, and only draw the required objects.

O 220- 200- LRAS 180- 160- 140- Price Level 120- 80- 60- 40- AD1 6 10 Real GDP per year ($ trillions)