Initially, an economy is in? long-run equilibrium with a real GDP of? $4 trillion.
Suppose that increases in marginal tax rates on wages reduce the supply of labor.
?1.) Using the line drawing tool?, show the effect on the economy. Properly label your new line.
?2.) Using the point drawing tool?, show the new equilibrium price level and output. Label the point E2.
Carefully follow the instructions? above, and only draw the required objects.
The situation shown above can be described as