- 17 M In b Ar Di 0o X Th G hc C Or C de M ht CCMM Th G wi+ Gre 5/5e86f5a2822dfd7782449c8e Chapter 11 - AD/AS Model Turned in automatically when late p Average Price Level 26000,60) SRAS AD Output (Real GDP) Chapter 11 - AD/AS. W Unit 4 Assignment (. DELL

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Question

Suppose that in 2008, Sanaton’s government increases taxes. Show how this event will change equilibrium output and price level by shifting either the SRAS or AD curve, and then answer the questions below.

Did equilibrium output increase or decrease?
Increase/Decrease

Did equilibrium price increase or decrease?
Increase/Decrease

 

-
17 M In b Ar
Di 0o X
Th G hc C Or
C de M ht
CCMM
Th G wi+
Gre
5/5e86f5a2822dfd7782449c8e
Chapter 11 - AD/AS Model
Turned in automatically when late p
Average
Price Level
26000,60)
SRAS
AD
Output (Real GDP)
Chapter 11 - AD/AS.
W Unit 4 Assignment (.
DELL
Transcribed Image Text:- 17 M In b Ar Di 0o X Th G hc C Or C de M ht CCMM Th G wi+ Gre 5/5e86f5a2822dfd7782449c8e Chapter 11 - AD/AS Model Turned in automatically when late p Average Price Level 26000,60) SRAS AD Output (Real GDP) Chapter 11 - AD/AS. W Unit 4 Assignment (. DELL
Expert Solution
Step 1

If the government increases taxes, the supply would decrease and the SRAS would shift leftwards.

It is shown in the figure below:

Economics homework question answer, step 1, image 1

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