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Refer to the Graph Above

question 53

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  Refer to the graph above. If the economy is in initial equilibrium at AD<sub>1</sub> and AS<sub>1</sub>, then from a strict supply-side perspective a cut in taxes or tax rates would produce an equilibrium price and quantity of: A)  P<sub>1</sub> and Q<sub>1</sub> B)  P<sub>2</sub> and Q<sub>2</sub> C)  P<sub>3</sub> and Q<sub>3</sub> D)  P<sub>4</sub> and Q<sub>4</sub> Refer to the graph above. If the economy is in initial equilibrium at AD1 and AS1, then from a strict supply-side perspective a cut in taxes or tax rates would produce an equilibrium price and quantity of:


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