Which of the Following Would Cause the AD Curve to Shift

question 33

Multiple Choice

Which of the following would cause the AD curve to shift to the right?

• A)An increase in sales taxes
• B)An increase in potential GDP
• C)A decrease in unemployment compensation
• D)An increase in social security payments
• E)A decrease in military purchases

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset which assumes the asset will lose an equal amount of value each year over its useful life.

Salvage Value

The estimated residual value of an asset at the end of its useful life, reflecting the amount it could be sold for or its disposal value.

Useful Life

The expected duration of time over which an asset is anticipated to be economically usable by one or more users.

Incremental Fixed Overhead

The fixed costs that will change as a direct result of a decision made by a company.