Refer to Figure 13.6 for the Following Questions

question 25

Multiple Choice

Refer to Figure 13.6 for the following questions.
Figure 13.6

-Suppose the federal government reduces income taxes. Assume that the movement from A to B in Figure 13.6 represents normal growth in the economy before the tax change. If the tax change is not effective and labour supply and savings do not increase because of the tax change, then the tax change will:

• A)decrease the price level below P₂.
• B)increase output above Y₂.
• C)not change the price level.
• D)shift LRAS₂ to the right.

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Definitions:

Incarcerated

The state of being confined in prison or jail, typically as punishment for committing a crime.

Stigmatized

Negatively evaluated because of a marker that distinguishes them from others.

Negatively Evaluated

Being assessed or perceived in an unfavorable or disapproving manner based on certain criteria or standards.

Perceived Harmfulness

The extent to which an individual believes a substance, behavior, or activity is capable of causing harm or risk.