Question: f there is a tax cut at the same time that major new sources of oil are discovered in the country, what would we expect

f there is a tax cut at the same time that major new sources of oil are discovered in the country, what would we expect to happen in the short run? If the economy was at the full employment level before these changes, what kind of gap the economy will get after these changes? Explain the natural adjustment process for closing this gap. Show your answer graphically.

i want fresh answer with diagram and explanation.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!