in Suppose the government reduces the corporate income tax rate. This will increase the return to firms for investing, which should investment and cause capital in the long run. Show the long-run effect of this reduction in corporate tax rates on long-run aggregate supply. 1.) Use the line drawing tool to show the effect on long-run aggregate supply. Properly label this line. 2.) Use the point drawing tool to show the new long-run equilibrium on the graph. Label this point B. Carefully follow the instructions above, and only draw the required objects. The long-run impact of a reduction in corporate tax rates would be OA. a decrease in long-run potential output while actually reducing inflation. OB. an decrease in long-run potential output while creating additional upward movements in prices. OC. an increase in long-run potential output while actually reducing inflation OD. an increase in long-run potential output while creating additional upward movements in prices. Price Level, P LRAS Real GOP AD