Which of the Following Combinations of Changes Would Have a Contractionary

question 37

Multiple Choice

Which of the following combinations of changes would have a contractionary effect on aggregate demand?

• A)An increase in government purchases and an increase in transfer payments.
• B)An increase in taxes and an increase in transfer payments.
• C)A decrease in taxes and an increase in transfer payments.
• D)An increase in taxes and a decrease in government purchases.

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Definitions:

C$1,500

Canadian dollars one thousand five hundred, often used in financial transactions to denote currency amount.

Airport Exchange Kiosk

An airport exchange kiosk is a physical location within an airport where travelers can exchange their home currency for that of their destination country.

Currency P

A placeholder reference for a specific currency being discussed or analyzed, with "P" standing for the particular currency in question.

Exchange Rate

The exchange rate of one currency in terms of another.