Use the following graph to answer the next question.If aggregate demand curve shifts from AD2 to AD1, the effect on real GDP will be a decrease from ________.

For decreases in wage taxes, substitution effects put negative pressure on tax revenues while wealth effects put positive pressure on tax revenues.

Answer the following statement true (T) or false (F)

Demand elasticity equals quantity times price.

Answer the following statement true (T) or false (F)