Based on your understanding of the AS- AD model and the IS- LM model, graphically illustrate and explain what effect a tax increase will have on the economy. In your graphs, clearly illustrate the short- run and medium- run equilibria.

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The Answer of Based on your understanding of the AS- AD model and the IS- LM model, graphically illustrate and explain what effect a tax increase will have on the economy. In your graphs, clearly illustrate the short- run and medium- run equilibria.

Based on Your Understanding of the AS- AD Model and the IS-