In the Aggregate Expenditures Model, a Reduction in Taxes May

question 114

Multiple Choice

In the aggregate expenditures model, a reduction in taxes may:

• A)increase saving.
• B)increase real GDP.
• C)reduce unemployment.
• D)do all of the above.

---

Definitions:

Labour Costs

Expenses related to compensating employees, including wages, salaries, benefits, and payroll taxes, significant for budgeting and financial planning.

Earnings Loss

The reduction in an individual's or entity's income, which can result from factors like unemployment, underemployment, or business downturns.

Destructive Stress

Impairs the performance of an individual.

Constructive Stress

Acts in a positive way to increase effort, stimulate creativity and encourage diligence in one’s work.