If Taxes Are Increased, the AD Curve

question 125

Multiple Choice

If taxes are increased, the AD curve

• A) is not affected because a change in taxes is a nominal change not real change.
• B) shifts rightward and aggregate demand decreases.
• C) shifts leftward and aggregate demand decreases.
• D) does not shift but there is a movement down along the curve.

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Definitions:

Cephalic

Pertaining to the head or the head end of the body.

Trapezius

A large, triangular muscle extending over the back of the neck and shoulders that moves the head and shoulder blade.

Distinct Muscles

Specific, individual muscles that are easily identifiable and separate from others in the body's muscular system.

Dorsal

Pertaining to the back side of the body in humans, or the upper side in quadrupeds and other animals.