How Do Tax Cuts and Government Expenditure Affect Aggregate Demand

question 47

Multiple Choice

How do tax cuts and government expenditure affect aggregate demand?

• A) Both shift aggregate demand right.
• B) Both shift aggregate demand left.
• C) Tax cuts shift aggregate demand right; government expenditure shifts aggregate demand left.
• D) Tax cuts shift aggregate demand left; government expenditure shifts aggregate demand right.

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Definitions:

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Mumford's Skills Model

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