An increase in net taxes at a given price level leads to
A. an increase in aggregate demand.
B. a decrease in aggregate demand.
C. no change in aggregate demand.
D. an increase in aggregate supply.
Answer: B
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A common misperception about consumer demand is that
A. demand depends on many other variables. B. price is a major determinant of quantity. C. it is a fixed amount. D. quantity cannot be determined in advance. E. All of these responses are correct.
An example of a tax-funded program intended to provide basic human needs is the provision of:
A. public education. B. police protection. C. health care. D. national defense.
The producer can raise the level of profit by hiring more units of a resource if:
a. the marginal revenue product of the resource is equal to the marginal factor cost. b. the marginal factor cost becomes negative. c. the marginal revenue product of the resource is greater than the marginal factor cost. d. the marginal revenue product falls to zero. e. the marginal revenue product of the resource is less than the marginal factor cost.
The fundamental economic problem faced by individuals is
A) scarcity. B) comparative advantage. C) fair allocations of goods and services. D) randomness in the distribution of income.