In the Short Run, a Tax Increase

question 29

Multiple Choice

In the short run, a tax increase

• A) shifts the DD curve to the right, increases output and appreciates the currency.
• B) shifts the AA curve to the left, increases output and depreciates the currency.
• C) shifts the AA curve to the left, decreases output and depreciates the currency.
• D) shifts the AA curve to the left, increases output and appreciates the currency.
• E) shifts the DD curve to the left, decreases output and depreciates the currency.

---

Definitions:

Contract Void

A contract with no legal validity from its inception, making it unenforceable by law.

Risk

The potential for experiencing loss, damage, or any other negative outcome as a result of action or inaction.

Timely Manner

The completion of tasks or fulfilment of obligations within an expected or agreed timeframe, often critical for efficiency or compliance.

Agreed Upon Time

A specific time or deadline that has been mutually decided upon by all parties involved in a transaction or agreement.