When Taxes Increase, Consumption Decreases

question 244

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 to the left
• D) by a movement to the right along a given aggregate-demand curve

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Definitions:

Mean

The average value in a set of numbers, determined by dividing the sum of all values by the count of numbers.

Distribution

The process of giving out something to multiple recipients, or the statistical arrangement of values within a dataset.

Mode

The value that occurs most frequently in a given set of data.

Distribution

In statistics, a mathematical representation of the observed or possible frequencies of occurrences of a range of outcomes.