In an Aggregate Demand-Aggregate Supply Diagram, Equal Decreases in Government

question 77

Multiple Choice

In an aggregate demand-aggregate supply diagram, equal decreases in government spending and taxes will

• A) shift the AD curve to the right.
• B) increase the equilibrium GDP.
• C) not affect the AD curve.
• D) shift the AD curve to the left.

---

Definitions:

Basic Approach

A fundamental strategy or methodology used in a particular field of study or profession, focusing on core principles and techniques.

Personality

A set of emotional, cognitive, and behavioral patterns that are stable over time and across situations, distinguishing one person from another.

Advocates

Individuals or groups that actively support or defend a cause, policy, or individual’s rights.

Psychic Energy

In psychoanalytic theory, the energy that allows the psychological system to function; also called libido.