If Taxes Are Increased, the AD Curve

question 125

Multiple Choice

If taxes are increased, the AD curve

• A) is not affected because a change in taxes is a nominal change not real change.
• B) shifts rightward and aggregate demand decreases.
• C) shifts leftward and aggregate demand decreases.
• D) does not shift but there is a movement down along the curve.

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Definitions:

Anxiety

An experience of fretfulness or agitation, usually over an event about to occur or something with an unpredictable result.

Cognition

The act of gaining insights and understanding through reflective thinking, experiential encounters, and sensory data.

Feeling

The subjective perception of emotions, often influencing mood, attitudes, and actions.

Hoarding Disorder

A psychological disorder characterized by persistent difficulty discarding possessions, regardless of their actual value, leading to clutter that disrupts living spaces.