When Taxes Increase, Consumption

question 305

Multiple Choice

When taxes increase, consumption

• A) increases, so aggregate demand shifts right.
• B) increases, so aggregate supply shifts right.
• C) decreases, so aggregate demand shifts left.
• D) decreases, so aggregate supply shifts left.

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Definitions:

Homeowners' Insurance

An insurance policy that provides financial protection against losses and damages to an individual's home and assets in the home.

Insurable Interest

A requirement for purchasing insurance, denoting the policyholder must stand to lose financially if the insured event occurs.

Damage

The monetary compensation required by law to be paid to an individual or entity as restitution for harm or injury they have incurred.

Indemnify

To compensate for harm or loss; in legal contexts, often involves a party agreeing to bear any losses or damages incurred by another party.