A Cut in Taxes _____, Shifting the Aggregate Demand Curve

question 35

Multiple Choice

A cut in taxes _____, shifting the aggregate demand curve to the _____.

• A) decreases government transfers and consumption; right
• B) increases disposable income and consumption; right
• C) decreases the marginal propensity to save, increasing consumption; left
• D) increases corporate profits and investment; left

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Definitions:

Franchising

A business model where a brand and business system is licensed by a franchisee from the franchisor.

Marketing Channel

The route or pathway through which goods and services travel from the producer to the consumer.

Economically Significant

Having a substantial impact or effect on the economy or financial markets, often influencing trends, policies, or decisions.

Referent Power

A form of influence where a person or group attracts others and builds loyalty based on charisma and personal traits.