If the Government Decreases Taxes,which of the Following Would Occur

question 116

Multiple Choice

If the government decreases taxes,which of the following would occur?

• A) An increase in GDP,an increase in the price level,an increase in money demand,and an increase in the interest rate
• B) An increase in GDP,a decrease in the price level,an increase in money demand,and a decrease in the interest rate
• C) A decrease in GDP,a decrease in the price level,a decrease in money demand,and a decrease in the interest rate
• D) A decrease in GDP,a decrease in the price level,an increase in money demand,and an increase in the interest rate
• E) An increase in GDP,an increase in the price level,a decrease in money demand,and a decrease in the interest rate.

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Definitions:

United States

A country located in North America, consisting of 50 states, a federal district, five major self-governing territories, and various possessions.

Japan

An island nation in East Asia, known for its rich culture, historical heritage, technological innovation, and distinct culinary arts.

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Pragmatics

The aspect of language relating to communicating effectively and appropriately with others.