How Do Tax Cuts and Government Expenditure Affect Aggregate Demand

question 47

Multiple Choice

How do tax cuts and government expenditure affect aggregate demand?

• A) Both shift aggregate demand right.
• B) Both shift aggregate demand left.
• C) Tax cuts shift aggregate demand right; government expenditure shifts aggregate demand left.
• D) Tax cuts shift aggregate demand left; government expenditure shifts aggregate demand right.

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Definitions:

Rituals

Established sequences of activities or behaviors that are conducted in specific circumstances, often bearing symbolic meaning.

Cultural Message

An idea or set of values conveyed through cultural symbols, practices, or artifacts, reflecting the beliefs of a particular community.

Sympathetic Nervous System

Part of the autonomic nervous system that prepares the body for physical activity by increasing heart rate and blood flow, among other responses.

Parasympathetic Nervous System

Part of the autonomic nervous system responsible for conserving energy and relaxing the body by slowing the heart rate and increasing intestinal and glandular activity.