Refer to the Graph $A D _ { 1 } \text { and } A S _ { 1 }$

question 225

Multiple Choice

Refer to the graph. If the economy is in initial equilibrium at AD $A D _ { 1 } \text { and } A S _ { 1 }$ , then, from a strict supply-
Side perspective, a cut in taxes or tax rates would produce an equilibrium price and quantity of

• A) \(P _ { 1 } \text { and } Q _ { 1 } \text {. }\)
• B) \(P _ { 2 } \text { and } Q _ { 2 }\)
• C) \(P _ { 3 } \text { and } Q _ { 3 }\)
• D) \(P _ { 4 } \text { and } Q _ { 4 }\)

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