If the government announces a big tax cut, which of the following combinations of events would be most likely to occur?
a. An upward shift of the aggregate expenditure line, a rightward shift of the money demand curve, and a rightward shift of the aggregate demand curve
b. A downward shift of the aggregate expenditure line, a leftward shift of the money demand curve, and a leftward shift of the aggregate demand curve
c. An upward shift of the aggregate expenditure line, a leftward shift of the money demand curve, and a rightward shift of the aggregate demand curve
d. A downward shift of the aggregate expenditure line, a rightward shift of the money demand curve, and a rightward shift of the aggregate demand curve
e. An upward shift of the aggregate expenditure line, a rightward shift of the money demand curve, and a leftward shift of the aggregate demand curve.
A
You might also like to view...
What are the likely effects of a sovereign debt crisis in terms of the government's ability to finance its debt?
What will be an ideal response?
If income in the United States rises relative to income in Japan, the yen should appreciate against the dollar, ceteris paribus.
Answer the following statement true (T) or false (F)
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
Taxes, tradable pollution permits, and direct regulation of pollution are all market approaches to dealing with pollution.
Answer the following statement true (T) or false (F)