By using AD-AS and Phillips Curve analysis, explain what happens to output and price level as...

By using AD-AS and Phillips Curve analysis, explain what happens to output and price level as well as unemployment and inflation rates for each of the situations listed below:

a) The government reduces the tax rate for individual income in order to encourage households’ spending.
b) Central Bank increases the required reserve ratio.

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Expert Solution

Rahul Sunny answered 1 year ago

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