Using the Aggregate Demand-Aggregate Supply Model, Predict What Happens in the Short

question 76

Multiple Choice

Using the aggregate demand-aggregate supply model, predict what happens in the short run when the federal government lowers the capital gains tax to stimulate investment.

• A) The aggregate demand curve shifts left; the aggregate supply curve is not affected; price level and real GDP decrease.
• B) The aggregate demand curve shifts right; the aggregate supply curve is not affected; price level and real GDP increase.
• C) The aggregate supply curve shifts left; the aggregate demand curve is not affected; price level increases; real GDP decreases.
• D) The aggregate supply curve shifts right; the aggregate demand curve is not affected; price level decreases; real GDP increases.

---

Definitions:

Methane Levels

The concentration or amount of methane gas in a particular environment, critical for tracking climate change and environmental health.

Oxygen Levels

The concentration of oxygen in a given environment, critical for the survival and performance of most life forms.

Direct Quotation

Text taken verbatim from a source, usually marked by quotation marks to indicate the exact words of another speaker or writer.

Paraphrasing

The act of rewording or restating text or speech using different words, often to achieve clearer and simpler communication.