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question 282

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Use the following to answer questions:
Figure: AD-AS Use the following to answer questions: Figure: AD-AS   -(Figure: AD-AS)  Refer to Figure: AD-AS. Suppose that initially the economy is at long-run equilibrium. If the government cuts taxes, _____ will shift to the _____. A)  SRAS; right B)  SRAS; left C)  AD<sub>1</sub>; right to AD<sub>2</sub> D)  AD<sub>1</sub>; left to AD<sub>3</sub>
-(Figure: AD-AS) Refer to Figure: AD-AS. Suppose that initially the economy is at long-run equilibrium. If the government cuts taxes, _____ will shift to the _____.


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