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Draw the Short-Run Aggregate Supply and Long-Run Aggregate Supply Curve

question 79

Essay

Draw the short-run aggregate supply and long-run aggregate supply curve on the same graph along with the aggregate demand curve. Illustrate the effects of an increase in aggregate demand on both the price level and the output level both in the short-run and the long-run.


Definitions:

Excise Tax

A tax on the production, sale, or consumption of a particular good or service.

Ability-To-Pay Principle

A tax principle that suggests taxes should be levied according to an individual's or entity's ability to pay, typically measured by income or wealth.

Revenue

The cumulative revenue produced from transactions involving the main business activities, such as selling goods or services.

Local Governments

Public administrations operating at the municipal, township, county, or regional level that manage local affairs, regulations, and services.

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