When Taxes Decrease, Consumption Increases

question 23

Multiple Choice

When taxes decrease, consumption increases. How is this situation represented in the aggregate demand and aggregate supply model?

• A) by a movement to the right along a given aggregate-demand curve
• B) by shifting aggregate demand to the right
• C) by shifting aggregate supply to the right
• D) by a movement to the left along a given aggregate-demand curve

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Definitions:

Notochord

A flexible rod-like structure in the embryos of all chordates, providing skeletal support and defining the primitive axis of the body.

Embryos

Early stages of development in multicellular organisms following fertilization.

Skeletal System

The framework of bones and other connective tissues that provides support, shape, and protection to the human body.

Cranial Cavity

The space within the skull that encases and protects the brain.