Suppose a Tax Cut Affects Aggregate Demand and Aggregate Supply

question 6

Multiple Choice

Suppose a tax cut affects aggregate demand and aggregate supply.Which of the shifts raise real GDP?

• A)both the shift of aggregate demand and the shift of aggregate supply
• B)the shift of aggregate demand,but not the shift of aggregate supply
• C)the shift of aggregate supply,but not the shift of aggregate demand
• D)neither the shift of aggregate demand nor the shift of aggregate supply

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Definitions:

Entropy

A measure of the disorder or randomness in a system, often related to the number of available states a system can occupy.

% Conversion

The percentage indicating how much of the reactants have been transformed into products in a chemical reaction.

ΔG°

The change in standard Gibbs free energy during a chemical reaction, indicating spontaneity at standard conditions.

Enthalpy

A thermodynamic quantity equivalent to the total heat content of a system. It is equal to the internal energy of the system plus the product of pressure and volume.