Which of the Following Policies Shifts the AD Curve the Farthest

question 173

Multiple Choice

Which of the following policies shifts the AD curve the farthest leftward?

• A) a rise in taxes of $10 billion
• B) a cut in taxes of $10 billion
• C) a decrease in government expenditure of $10 billion
• D) a decrease in both government expenditure and taxes of $10 billion

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Definitions:

Relationship

The way in which two or more concepts, objects, or people are connected, or the state of being connected.

Rewarding

Providing a positive benefit or reinforcement following a desired behavior, thereby increasing the likelihood of its future occurrence.

Learned Optimism

The concept of developing a more positive outlook on life through techniques that challenge and change negative beliefs and attitudes.

Internal/External

Refers to perspectives, influences, or factors originating from within or from outside an entity.