A Decrease in Tax Rates

question 125

Multiple Choice

A decrease in tax rates

• A)has no effect on the AD curve.
• B)can lead to an increase in potential GDP.
• C)causes the AD curve to shift left.
• D)has no long-run effect on potential GDP.
• E)has only a short-term effect on real GDP.

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Definitions:

Punish Offender

The process or act of imposing a penalty on an individual or entity for breaking the law or rules.

Negligent Person

An individual who fails to take reasonable care, resulting in harm or injury to another person or to property.

Tort

A civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act.

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A process in which a participant is fully educated about the key facts of a matter before agreeing or participating in it.