If the government increases the income tax rate they likely intend for:
A. C to increase, shifting aggregate demand to the right.
B. I to increase, shifting aggregate demand to the right.
C. C to decrease, shifting aggregate demand to the left.
D. G to increase, shifting aggregate demand to the right.
Answer: C
You might also like to view...
Give two reasons why GDP does not reflect total production in an economy
What will be an ideal response?
As a price setter, a monopoly
a. can establish any price it wants for each output level b. can sell any output level it wants for each price c. is constrained by the market demand curve d. can use its pricing policy to shift the market demand curve e. faces an upward-sloping demand curve for its output
Which of the following CANNOT be true at any output along a perfectly competitive firm's short-run supply curve?
A. Marginal cost is greater than average total cost. B. Marginal cost is greater than average variable cost. C. Average variable cost is greater than marginal cost. D. Average total cost is greater than marginal cost.
If the nominal interest rate is 13 percent and the anticipated rate of inflation is 8 percent, the real interest rate is
A. 21 percent. B. -5 percent. C. 13 percent. D. 5 percent.