An Increase in Personal Income Tax Rates Will Cause A(n)

question 6

Multiple Choice

An increase in personal income tax rates will cause a(n) :

• A) Decrease (or shift left) in aggregate demand
• B) Increase (or shift right) in aggregate demand
• C) Decrease in the quantity of real output demanded (or movement up along AD)
• D) Increase in the quantity of real output demanded (or movement down along AD)

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Definitions:

Entropy

A measure of disorder or randomness in a closed system, often used in physics and information theory.

Equivalence

The state of being equal in value, function, or meaning.

Psychic Value

The importance or significance that an individual attaches to objects, events, or relationships as per their emotional or unconscious investment.

Desires

Strong feelings of wanting or wishing for something to happen or be the case.