In the Short Run, an Increase in Autonomous Taxes Will

question 266

Multiple Choice

In the short run, an increase in autonomous taxes will
I. shift the aggregate demand curve leftward.
II. decrease real GDP.
III. increase the government purchases multiplier.
IV. increase the autonomous tax multiplier.

• A) I and III
• B) II and IV
• C) I only
• D) I and II

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Definitions:

Positively Correlated

A relationship between two variables where both variables move in tandem in the same direction.

Same Direction

Refers to variables moving in unison, either increasing or decreasing together.

NASCAR

The National Association for Stock Car Auto Racing, a sanctioning body for multiple auto-racing sports events.

Organic Produce

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