Assume the economy is operating below the full employment level of output:

1. Congress votes to decrease business taxes on all small businesses in the United States. Using a correctly drawn AD/AS graph, show and explain how this change will affect each of the following in the short-run:

• Output
• Price level

1. Using a correctly drawn and labeled Phillips curve, show and explain how this policy will affect each of the following as the economy approaches a new equilibrium:

• the Phillips curve
• the natural rate of unemployment

please make sure to draw out the graphs