Suppose a Tax Cut Affects Aggregate Demand and Aggregate Supply

question 6

Multiple Choice

Suppose a tax cut affects aggregate demand and aggregate supply.Which of the shifts raise real GDP?

• A)both the shift of aggregate demand and the shift of aggregate supply
• B)the shift of aggregate demand,but not the shift of aggregate supply
• C)the shift of aggregate supply,but not the shift of aggregate demand
• D)neither the shift of aggregate demand nor the shift of aggregate supply

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Definitions:

Extraneous Variable

A variable that is not the focal point of a study but may affect the outcome of the research if not properly controlled.

Genetic Predisposition

A natural inclination or tendency for individuals to develop certain diseases or disorders due to their genetic makeup.

Census Report

A detailed collection of data and statistics about the population, typically gathered by a government, covering aspects such as demographic, economic, and social information.

Manipulation

An attempt to influence or control someone's behavior or emotions in a subtle, deceptive, or underhanded way.