Question: The following chart shows data on aggregate supply, aggregate demand, and the price level for the fictional country of Westobia. Price Level AD AS 220

The following chart shows data on aggregate supply, aggregate demand, and the price level for the fictional country of Westobia. Price Level AD AS 220 640 540 230 630 580 240 620 620 250 610 660 260 600 680 270 590 700 280 580 710 . On a complete labeled AD/AS graph, plot the AD/AS diagram from the data. Identify the equilibrium, labeling it E. . Imagine that, as a result of a government tax cut, aggregate demand becomes higher by 50 at every price level. Plot the new AD on your graph, labeling the new equilibrium E2. How will the new equilibrium alter output? How will it alter the price level? What do you think will happen to employment

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