If a Tax Cut Increases Aggregate Demand More Than Aggregate

question 44

Multiple Choice

If a tax cut increases aggregate demand more than aggregate supply, real GDP ________ and the price level ________.

• A) increases; does not change
• B) decreases; rises
• C) increases; rises
• D) decreases; falls
• E) increases; falls

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Definitions:

Silica Crystals

Rigid, crystalline structures made of silicon dioxide (SiO2), found in nature as quartz and used industrially and scientifically for various applications.

Spicules

Small, spike-shaped structures found in certain animals like sponges, serving as a skeletal element.

Radial Symmetry

Body plan in which similar parts are arranged around a central axis, like spokes of a wheel.

Tissue Layers

Various layers of cells in an organism that have specific functions and form organs and other body structures.