Question: Using the dynamic aggregate demand and aggregate supply model, illustrate (using a diagram) and explain the impact of following policy decisions on income, unemployment, and

Using the dynamic aggregate demand and aggregate supply model, illustrate (using a diagram) and explain the impact of following policy decisions on income, unemployment, and inflation in Australia in both short-run and long-run.

Part (a)

The Federal Government is lowering taxes to help people navigate the higher cost of living.

My question is: would I be able to illustrate the change in income, unemployment and inflation on the one diagram? What effect would a tax increase have on each of these things and how would that look on a graph?

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