If a Change in the Tax Laws Leads to a $100

question 62

Multiple Choice

If a change in the tax laws leads to a $100 billion decrease in tax revenue,then aggregate demand

• A)increases by $100 billion.
• B)increases by less than $100 billion.
• C)increases by more than $100 billion.
• D)decreases by $100 billion.
• E)decreases by more than $100 billion.

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Definitions:

Marginal Revenue

The rise in income achieved by selling an extra unit of a product.

Total Revenue

The overall amount of money generated by a company or entity from its activities, such as sales of goods or services, before any costs or expenses are deducted.

One More Unit

The concept of producing or acquiring an additional unit of a good or service and analyzing its impact on overall operations or outcomes.

Pure Competition

A market structure characterized by a large number of small firms producing identical products with no single firm influencing the market price.