A Decrease in Government Expenditure Shifts the AD Curve ________

question 216

Multiple Choice

A decrease in government expenditure shifts the AD curve ________ and a decrease in taxes shifts the AD curve ________.

• A) rightward; rightward
• B) rightward; leftward
• C) leftward; rightward
• D) leftward; leftward

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Definitions:

Combinations of Capital

Various ways in which a firm can organize its financial resources and assets to support its production process and operations.

Total Cost

The sum of fixed and variable costs incurred in the production of goods or services.

Isocost Line

A graphical representation in economics that shows all possible combinations of inputs that cost the same total amount.

Slope

A measure of the steepness or incline of a line, calculated as the ratio of the vertical change to the horizontal change between two points on the line.