What Happens to Aggregate Demand If People Want to Save

question 219

Multiple Choice

What happens to aggregate demand if people want to save more for retirement and the government raises taxes?

• A) Aggregate demand shifts right.
• B) Aggregate demand shifts left.
• C) If people save more, aggregate demand shifts right; if the government raises taxes, aggregate demand shifts left.
• D) If people save more, aggregate demand shifts left; if the government raises taxes, aggregate demand shifts right.

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Definitions:

Action Potentials

Electrical impulses that are the means of communication and signal transmission within the nervous system, particularly among neurons.

Excitatory Postsynaptic

Pertaining to the process in which a neurotransmitter increases the likelihood of an action potential firing in the postsynaptic neuron.

Electric Potential

The amount of electric potential energy per unit charge at a point in a field, representing the force that would be exerted on a positive test charge placed at that point.

Neuron

A nerve cell that is the basic building block of the nervous system, responsible for transmitting information throughout the body via electrical and chemical signals.