Which of the Following Would Likely Result in a Decrease

question 70

Multiple Choice

Which of the following would likely result in a decrease in aggregate demand?

• A) tax increases
• B) a reduction in the real interest rate
• C) increased job and future income security
• D) a rise in the quantity of money in circulation

---

Definitions:

Normal Profit

The level of profit that is just sufficient to keep an entrepreneur in business, equaling total revenues minus explicit and implicit costs.

Price System

An economic mechanism wherein prices are determined by the interaction of supply and demand, guiding the allocation of resources and distribution of goods and services.

Scarce Goods

Items that are limited in availability relative to the desires or needs of consumers.

Laissez-Faire Economy

Literally from the French: “allow [them] to do.” An economy in which individual people and firms pursue their own self-interest without any central direction or regulation.