Which of the Following Is Correct

question 10

Multiple Choice

Which of the following is correct?

• A)Well designed tax cuts can increase investment which fluctuates more than consumption over the business cycle.
• B)Well designed tax cuts can increase investment but it fluctuates less than consumption over the business cycle.
• C)Tax cuts have little effect on investment which fluctuate more than consumption over the business cycle.
• D)Tax cuts have little effect on investment but it fluctuates less than consumption over the business cycle

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Definitions:

Shift Left

In economics, it typically refers to a decrease in the supply or demand of a product, shown by a leftward shift of the supply or demand curve.

Supply

The sum of a certain item or service that consumers can obtain.

Equilibrium Quantity

The quantity of goods or services supplied that is equal to the quantity demanded at the market price.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, resulting in no surplus or shortage.