In an Effort to Avoid Recession, the Government Implements a Tax

question 42

Multiple Choice

In an effort to avoid recession, the government implements a tax rebate program, effectively cutting taxes for households. We would expect this to

• A) affect neither aggregate supply nor aggregate demand.
• B) increase aggregate demand.
• C) reduce aggregate demand.
• D) reduce aggregate supply.

---

Definitions:

Acre

A unit of land area used in the imperial and US customary systems, equivalent to 4,840 square yards or about 4,047 square meters.

Cubic Meter

A unit of volume in the International System of Units, representing the volume of a cube with edges one meter in length.

Liter

A metric unit of volume equal to one cubic decimeter, commonly used to measure liquids and other volumes in the scientific and commercial worlds.

Snowmelt

The process of snow and ice melting, often contributing to river flow in many parts of the world, and can lead to flooding if rapid.