Using the Aggregate Supply - Aggregate Demand Model, the Tax

question 24

Multiple Choice

Using the aggregate supply - aggregate demand model, the tax cuts of 2001 and 2003 that came in the form of tax rebate checks would cause

• A)aggregate demand to shift to the right.
• B)aggregate supply to shift to the right.
• C)aggregate demand to shift to the left.
• D)aggregate supply to shift to the left.

---

Definitions:

Income Tax Rate

The percentage at which an individual or corporation is taxed; the rate may vary by income level, type of income, or other factors.

Working Capital

The distinction between a firm's current assets and its current liabilities, revealing the company's short-term financial health.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal installments.

Incremental Sales

Additional sales generated by a new promotional strategy or marketing campaign, beyond the expected or normal sales volume.