AD Will Shift to the Left, Other Things Being Equal

question 85

Multiple Choice

AD will shift to the left, other things being equal, when:

• A)the government budget surplus increases because government purchases fell.
• B)the government budget surplus increases because taxes rose.
• C)the government budget surplus increases because transfer payments fell.
• D)under any of the above circumstances.

---

Definitions:

Monthly Salary Allowance

A fixed amount of money or compensations given on a monthly basis, often excluding any bonuses or additional pay.

Net Income

The total profit of a company after subtracting all expenses from revenues, also known as the bottom line.

Limited Life

The concept that an asset or an entity has a finite existence or operational period before it ceases to be useful or exist.

Corporation

A legal entity that is separate and distinct from its owners, providing them with limited liability, and is permitted to own assets, incur liabilities, and sell securities, among other rights.