Other Things Equal, a Reduction in Personal and Business Taxes

question 123

Multiple Choice

Other things equal, a reduction in personal and business taxes can be expected to

• A) increase aggregate demand and decrease aggregate supply.
• B) increase both aggregate demand and aggregate supply.
• C) decrease both aggregate demand and aggregate supply.
• D) decrease aggregate demand and increase aggregate supply.

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Definitions:

Success

The achievement of a goal or the attainment of prosperity, fame, or a favorable outcome.

Confirmation Bias

The tendency to seek information that supports one’s beliefs while not pursuing disconfirming information.

External Attribution

The process of attributing the cause of a person's behavior to situational factors outside the person.

Self-Serving Bias

The tendency to attribute one’s successes to personal factors and one’s failures to situational factors.