Refer to the Accompanying Figure

question 51

Multiple Choice

Refer to the accompanying figure. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD¹ to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.

• A)D; B
• B)D; C
• C)B; C
• D)A; B

---

Definitions:

Toxic Substances Control Act

A United States law enacted in 1976 aimed at regulating the introduction of new or already existing chemicals.

Federal Regulation

Laws and rules established by the federal government to govern the conduct of individuals, businesses, and other entities within the United States.

Toxic Substances

These are chemicals or compounds that can cause harm to humans, animals, or the environment when they are released or exposed to living organisms.

Public Water Supply System

Infrastructure and facilities used to collect, treat, and distribute potable water to the public.