Question: How could you use the dynamic aggregate demand-aggregate supply (AD/AS) framework to explain the impact of lower taxes on inflation and output in the economy?

How could you use the dynamic aggregate demand-aggregate supply (AD/AS) framework

How could you use the dynamic aggregate demand-aggregate supply (AD/AS) framework to explain the impact of lower taxes on inflation and output in the economy? You can think of the impact of lower taxes as an Ishock. Such a shock would shift the curve to the 1. In the absence of other changes, this would put pressure on output and pressure on inflation

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