How do lower taxes affect aggregate demand?
A) They increase disposable income, consumption, and aggregate demand.
B) They increase aggregate supply and thus increase aggregate demand as well.
C) they increase corporate investment and aggregate demand.
D) They reduce disposable income, consumption, and aggregate demand.
A
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Which of the following does NOT contain an externality?
A) I sell you an ice cream and you drip it all over the person sitting next to you. B) I sell you an ice cream and it gives you a headache. C) I sell you an ice cream and you share it with your friend. D) I give you an ice cream and you share it with a friend.
In the long run,
a. at least one of the firm's inputs is fixed b. customer tastes and preferences are fixed c. the firm may vary all inputs d. sunk costs become variable costs e. government intervention is inevitable