What Effect Would a Cut in Taxes Combined with an Increase

question 96

Multiple Choice

What effect would a cut in taxes combined with an increase in transfer payments have on AD?

• A)It would decrease AD.
• B)It would increase AD.
• C)It would have an indeterminate effect on AD.
• D)It would leave AD unchanged.

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Definitions:

Berry

A type of simple fruit with seeds and pulp produced from the ovary of a single flower; the skin is often edible.

Imbibition

The absorption of water by a seed prior to germination.

Apical Dominance

The inhibition of axillary (lateral) buds by a shoot tip.

Determinate Growth

A growth pattern in plants and some animals in which growth stops after reaching a certain size or age.