In the Aggregate Demand-Aggregate Supply Model, Everything Else Remaining Unchanged

question 43

Multiple Choice

In the aggregate demand-aggregate supply model, everything else remaining unchanged, an increase in taxes causes ____to _____in the short run.

• A)output; increase
• B)output; decline
• C)output; remain unchanged
• D)government spending; increase

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Definitions:

Responsiveness

The degree to which a system or entity promptly reacts to inputs, changes, or stimuli.

Absolute Amounts

Numerical values or quantities that are not relative or comparative and exist independently as total figures.

Economists

Professionals who study, develop, and apply theories and principles of economics to understand how economies work and to analyze economic policies.

Determinants

Factors that cause changes in the behavior of individuals, systems, or processes, often studied to understand cause-and-effect relationships.