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Assume the economy is operating below the full employment level of output: a. Congress votes to decrease business taxes on all small businesses in
Assume the economy is operating below the full employment level of output: a. 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 thi: change will affect each of the following in the short-run: i. Output ii. Price level b. 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: i. the Phillips curve ii. the natural rate of unemployment
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