When Taxes Increase, Consumption Decreases

question 230

Multiple Choice

When taxes increase, consumption decreases. How is this situation represented in the aggregate demand and aggregate supply model?

• A)by a movement to the left along a given aggregate demand curve
• B)by shifting aggregate demand to the left
• C)by shifting aggregate supply the left
• D)by a movement to the right along the aggregate demand curve

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Definitions:

Financing Start-Up

The process of obtaining capital through various means to fund the initial operations and growth of a new business venture.

Spread of Innovation

The process by which new ideas, practices, or products gain acceptance and are utilized by individuals, organizations, or societies.

Imitation

The act of copying or replicating the design, features, or actions of something typically to achieve similar benefits or competitive advantage.

Development

The process of economic growth, expansion, or realization of regional resource potential, often associated with improvements in the quality of life and living standards.