The origins of modern monetarism lie in the work of the

If there is no output for which product price is sufficient to cover variable costs

A) the firm should stay open in the short-run. B) the firm should shut down in the short run. C) the firm earns economic profits by staying open. D) the firm should increase production.

Show the impact of tax reduction and simplification using the dynamic aggregate demand and aggregate supply model. Clearly show and identify the impact of the tax change. Assume that aggregate demand and short-run aggregate supply shift as they typically

do in the dynamic model. Show what happens to the price level and real GDP because of the tax change. What will be an ideal response?