A Change in Net Taxes Affects the Equilibrium Quantity of GDP

question 41

Multiple Choice

A change in net taxes affects the equilibrium quantity of GDP demanded_____.

• A)in the same way as a change in government purchases does
• B)in the same way as a change in planned investment does
• C)in the same way as a change in net exports does
• D)only indirectly,changing the level of disposable income
• E)in an unpredictable manner

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Definitions:

Capital Gain

The increase in value of an asset or investment above its purchase price, often realized upon sale of the asset.

Total Return

The complete return on an investment over a given time period, including both capital gains and dividends or interest, expressed as a percentage of the initial investment cost.

Dividends

Payments made by a corporation to its shareholder members as a distribution of profits.

Canadian Treasury Bills

Short-term government securities issued by the Government of Canada, maturing in one year or less, and used as a means for the government to raise funds.