An increase in business tax rates, combined with a decrease in consumer confidence, would have what effect on aggregate demand?
a. AD would increase
b. AD would decrease.
c. AD would stay the same.
d. AD could either increase or decrease, depending on which change was of a greater magnitude.
b
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Sammy has a drone that he values at $1,500. Frank values the same drone at $1,000. The government offers a subsidy of $800 to the buyers of drones, and Sammy and Frank agree on a price of $1,600
Producer surplus is ________ and consumer surplus is ________. A) $100; $200 B) $700; $600 C) $200; $1,400 D) $300; $100
The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue?
A) The total revenue will increase. B) The total revenue will decrease. C) The total revenue will not change. D) There is not enough information to determine what happens to the total revenue.