If Personal Taxes Were Decreased and Input Productivity Increased Simultaneously

question 151

Multiple Choice

If personal taxes were decreased and input productivity increased simultaneously, the equilibrium:

• A)output would rise.
• B)output would fall.
• C)price level would necessarily fall.
• D)price level would necessarily rise.

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Definitions:

Behavioral Choices

Decisions individuals make concerning their actions, which are guided by cognitive processes, environmental influences, and past experiences.

Habituation

The process by which an individual becomes accustomed to a stimulus through repeated exposure, leading to decreased response.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without the need for prior learning or conditioning.

Sensitization

The process by which an individual becomes more sensitive to a stimulus after being exposed to it, often leading to heightened responses.