Use the Following to Answer Questions

question 37

Multiple Choice

Use the following to answer questions:
-(Figure: Fiscal Policy II) Refer to Figure: Fiscal Policy II. Suppose that this economy is in equilibrium at E₁. If there is a decrease in taxes, _____ will shift to the _____, causing a(n) _____ in the price level and a(n) _____ in real GDP.

• A) AD_1; right; increase; increase
• B) AD_1; left; decrease; decrease
• C) AD_2; right; increase; increase
• D) AD_2; right; decrease; increase

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Definitions:

Duty of Care

A legal obligation imposed on individuals to exercise a reasonable level of care to avoid causing harm to others.

Unusual Bone Disease

A rare or uncommon medical condition affecting the skeletal system, potentially leading to abnormalities or impairments.

Contra Proferentum Rule

A rule of interpretation; ambiguous provisions in a written contract are to be construed against the party that drafted the agreement.

Exclusion of Liability

Clauses in a contractual agreement that seek to limit or eliminate legal responsibility for certain acts or omissions.