What Is the Effect of a Change in Taxes on Aggregate

question 129

Multiple Choice

What is the effect of a change in taxes on aggregate demand?

• A)Aggregate demand would shift right if taxes increased.
• B)Aggregate demand would shift right if taxes decreased.
• C)Aggregate demand would shift left if taxes increased.
• D)Aggregate demand would shift left if taxes decreased.

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Definitions:

Net Present Value

The contrast in the present value of money received and the present value of money spent over a designated duration, applied in capital budgeting to appraise the profitability of a potential investment.

Cash Inflows

Refers to the money received by a business from its various activities, including sales, investments, financing, etc.

Initial Cost

The upfront expenditure required to purchase an asset or to start a project, including setup or installation fees.

Initial Outlay

The initial investment amount required to start a project or purchase an asset.