A Cut in Taxes _____, Shifting the Aggregate Demand Curve

question 35

Multiple Choice

A cut in taxes _____, shifting the aggregate demand curve to the _____.

• A) decreases government transfers and consumption; right
• B) increases disposable income and consumption; right
• C) decreases the marginal propensity to save, increasing consumption; left
• D) increases corporate profits and investment; left

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Definitions:

Prototypes

Original or primary forms of something from which copies are made; in cognitive psychology, it refers to a mental image or best example of a particular category.

Likelihood

The probability or chance that a given event will occur.

Surveillance Strategy

A plan or approach designed to systematically monitor activities or behaviors, often for the purpose of gathering information, ensuring security, or enforcing policies.

Representativeness Heuristic

A cognitive shortcut where the likelihood of something is judged based on how similar it is to a typical case.