Use the following to answer questions: 
-(Figure: Fiscal Policy I) Refer to Figure: Fiscal Policy I. Suppose that this economy is in equilibrium at E1. If there is a decrease in taxes, _____ will shift to the _____, causing a(n) _____ in the price level and a(n) _____ in real GDP.
Definitions:
Price Hike
An increase in the selling price of goods or services, often due to higher costs or improved demand.
Value-Based Pricing
Setting the price of a product or service based on the perceived value it offers to customers rather than its cost of production.
Operating Cost
Expenses associated with the day-to-day functions of a business, excluding the cost of goods sold (COGS).
Useful Life
The estimated duration of time that an asset is expected to be usable for its intended purpose.
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