Government Spending Affects Aggregate Demand Directly, and Tax Changes Affect

question 181

Multiple Choice

Government spending affects aggregate demand directly, and tax changes affect aggregate demand indirectly.Therefore, changes in

• A)taxes are ineffective in changing aggregate demand.
• B)government spending affect aggregate demand more quickly than changes in taxes.
• C)taxes are virtually useless as a stabilization tool.
• D)government spending should be used with great caution.

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Definitions:

Daily Target

is a specific goal or objective set to be achieved within a single business day.

Focus

The act of directing attention or resources towards a specific goal or task.

Organization

An arranged group of people with a particular purpose, such as a business, government body, or charity.

Individual

Pertaining to or characteristic of a single, separate person or thing; distinct from others in a group.