Suppose a Tax Cut Affected Aggregate Demand and Aggregate Supply

question 1

Multiple Choice

Suppose a tax cut affected aggregate demand and aggregate supply.The shift in aggregate supply would make the

• A)price level and real GDP change by more than otherwise.
• B)price level change by more than otherwise and real GDP change by less than otherwise.
• C)price level change by less than otherwise and real GDP change by more than otherwise.
• D)price level and real GDP change by more than otherwise

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Definitions:

Indirectly

Not directly, but by means of an intermediate step or through a secondary cause.

Hypothesis

A proposed explanation for a phenomenon, made as a starting point for further investigation, testing, or experimentation.

Informative

Providing useful or important information or details.

Assumptions

Statements or ideas accepted as true without proof, used as the basis for reasoning or argumentation.