If the Government Increases Taxes,which of the Following Will Occur

question 113

Multiple Choice

If the government increases taxes,which of the following will occur in the short run?

• A) An increase in GDP,an increase in the price level,an increase in money demand and an increase in the interest rate.
• B) An increase in GDP,an increase in the price level,a decrease in money demand and an increase in the interest rate.
• C) An increase in GDP,a decrease in the price level,an increase in money demand and an increase in the interest rate.
• D) A decrease in GDP,a decrease in the price level,a decrease in money demand and a decrease in the interest rate.
• E) A decrease in GDP,an increase in the price level,an increase in money demand and a decrease in the interest rate.

---

Definitions:

John Bell

A 19th-century American politician who was the Constitutional Union Party candidate for the 1860 presidential election.

1860 Election

The United States presidential election in which Abraham Lincoln was elected as the 16th President, leading to the secession of Southern states.

John Brown

An American abolitionist who believed in and advocated armed insurrection as the only way to overthrow the institution of slavery in the United States.

William Lloyd Garrison

A prominent American abolitionist, journalist, and social reformer in the 19th century, best known for his tireless efforts to end slavery in the United States.