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.

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Definitions:

New York Stock Exchange

One of the largest stock exchanges in the world located at Wall Street, New York, where securities are bought and sold.

Tokyo Stock Exchange

A major stock market exchange in Japan, serving as a hub for the trading of stocks, bonds, and other securities.

Financial Assets

Stocks and bonds. More generally a document giving its owner a claim to certain future cash flows. Stocks base that claim on ownership (equity), while bonds base it on debt. Also called a security.

Future Cash Flows

Projected financial gains or losses for a specific period in the future.