Exhibit 15-7  Aggregate Demand and Supply Model Beginning at Equilibrium

question 92

Multiple Choice

Exhibit 15-7  Aggregate demand and supply model Beginning at equilibrium E₁ in Exhibit 15-7, assume the marginal propensity to consume (MPC) is 0.90 and the government increases taxes by $100 billion. The aggregate demand curve will shift to the:

• A) left by $1,000 billion.
• B) right by $1,000 billion.
• C) right by $900 billion.
• D) left by $900 billion.

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Definitions:

Fixtures

Objects that are initially personal property but become real property when attached to the land or a structure in a permanent manner.

Tenants By The Entirety

A form of joint property ownership reserved for married couples, where each owns the entire property and upon one's death, the other becomes the sole owner.

Inheritance Interest

The stake or claim that an individual has in the property or estate of a deceased person.

Claim

A demand for something as due or owed, typically a request for money, property, or rights from a party believed to be liable.