Temporary Tax Cuts Would Cause

question 65

Multiple Choice

Temporary tax cuts would cause

• A) the AA-curve to shift left.
• B) the AA-curve to shift right.
• C) the DD-curve to shift left.
• D) the DD-curve to shift right.
• E) a shift in the AA-curve, although the direction is ambiguous.

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Definitions:

Prepaid Insurance

An asset account that reflects payments made for insurance services before the coverage period.

Asset Account

A record in the financial statements that shows the value of a company's assets, including current, fixed, tangible, and intangible assets.

Liability Accounts

Financial accounting ledgers that record amounts owed to creditors or suppliers.

Debits

Accounting entries that increase asset or expense accounts, or decrease liability, equity, or revenue accounts.