Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD 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. D; B
C. A; B
D. B; C
Answer: B
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Exemptions are more desirable than deductions for a person in the 36% tax bracket.
A. True B. False C. Uncertain
Two goods that are complementary are:
a. wrapping paper and scotch tape. b. letter and fax. c. beef and chicken. d. bicycle and motorcycle. e. Coke and Pepsi.
At the equilibrium price, Question 21 options:
A. the quantity demanded equals supply. B. the government is setting the price. C. the quantity supplied equals demand. D. the quantity demanded equals the quantity supplied. E. there can be either a small surplus or a small shortage.
The following is budget information for a hypothetical economy. All data are in billions of dollars.YearGovernment SpendingTax RevenuesGDP1$1,100$1,000$10,00021,2501,40010,20031,4501,45010,50041,6001,50010,90051,8001,55011,200Refer to the above data. What year is the budget deficit $250 billion?
A. Year 2 B. Year 5 C. Year 3 D. Year 4