Assume the economy is in long run full employment


Assume the economy is in long run full employment equilibrium with unemployment at the full employment rate of 6% and inflation of 4%. In this situation what would happen to aggregate demand and aggregate supply, unemployment, and inflation should the federal government cut business and individual taxes by 4 trillion dollars next year? Use the Phillips Curve and aggregate demand and aggregate supply to support your answer.

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Macroeconomics: Assume the economy is in long run full employment
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