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Answer to Question #76353 in Economics for Iulian Cosmin Bruma
Question #76353
Can anyone help me with this question? Using the AD-AS model, predict the effect of a rise in national sales tax on aggregate supply and demand curves, and on aggregate output and the price level. How and why might your analysis differ under more heterodox assumptions regarding the shape of the AD and AS curves?
Expert's answer
If the national sales tax rise, then both AD and AS will decrease and shift leftwards.
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