If the Government Increases Taxes,which of the Following Will Occur

question 113

Multiple Choice

If the government increases taxes,which of the following will occur in the short run?

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

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Definitions:

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Communication or exchange of information between individuals through the internet or other digital platforms.

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A marriage between individuals of different races, often involving complex dynamics of social acceptance and discrimination.

Supreme Court

The highest judicial body in a country or jurisdiction, whose decisions set precedents that lower courts must follow.

Unconstitutional

Actions or laws that are deemed to violate the principles or established precedents laid out in a country's constitution.