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:

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A psychologist known for his theory on psychological development of human beings across eight stages from infancy to adulthood.

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