How Is Aggregate Expenditure Affected When Net Taxes Are Cut

question 94

Multiple Choice

How is aggregate expenditure affected when net taxes are cut?  

• A) Government purchases fall. 
• B) Government purchases rise. 
• C) Consumption falls. 
• D) Consumption rises.

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Definitions:

Normative Statement

A type of statement that expresses a value judgment about what ought to be, based on personal beliefs rather than hard facts.

Normative Statement

A statement that expresses a value judgment or opinion about what ought to be, rather than what is empirically observable.

Normative Statement

A statement that expresses a value judgment about whether a situation is desirable or undesirable. It reflects opinions rather than facts.

Positive

Refers to factual statements or assertions that can be tested or verified.