Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
Economics
You might also like to view...
In Exhibit 11 the expansion phase of the business cycle is represented by points
a. A and C.
b. B and F.
c. B and D.
d. C and G.
Economics
In the market for loanable funds:
A. an increase in available bank lending will increase the interest rate. B. a decrease in saving will reduce the interest rate. C. an increase in borrowing for investment will increase the interest rate. D. a decrease in government borrowing will increase the interest rate.
Economics
A quota caps the quantity of an import.
a. true b. false
Economics
The definition of economic growth is the annual percentage
A. increase in the total nominal GDP. B. increase in the per capita real GDP. C. increase in total exports. D. increase in the per capita nominal GDP.
Economics