A Reduction in Taxes, Combined with an Increase in Government

question 30

Multiple Choice

A reduction in taxes, combined with an increase in government purchases in an economy, would:

• A)increase aggregate demand and close a recessionary gap in the economy.
• B)decrease aggregate demand and create a recessionary gap in the economy
• C)leave aggregate demand unchanged and create a recessionary gap in the economy.
• D)have an indeterminate effect on aggregate demand and close a recessionary gap in the economy.
• E)have an indeterminate effect on aggregate demand and create a recessionary gap in the economy

---

Definitions:

Positive Well-being

A state of good mental and physical health, happiness, and life satisfaction.

Competent Progress

This term might refer to the effective and efficient advancement or improvement in a particular skill or area of knowledge. If not a recognized key-term, then NO.

Workplace Relationships

The social interactions and bonds formed between colleagues in a professional setting, which can impact job satisfaction and productivity.

Psychological Stressors

Events, situations, or stimuli that cause stress and can affect an individual's psychological well-being.