When taxes increase, consumption _____, business investment ______, and real GDP output ______. A. decreases shifting aggregate demand left; decreases shifting aggregate supply left; decreases reducing economic growth, and lowering the standard of living. B. increases shifting aggregate demand right; increases shifting aggregate supply right; increases resulting in sustained economic growth, and a higher standard of living. C. decreases shifting aggregate demand left; decreases shifting aggregate supply left; increases resulting in sustained economic growth, equality and prosperity for all. D. None of the answers are correct.

When taxes increase, consumption _, business investment , and real GDP output ____. A. decreases shifting aggregate demand left; decreases shifting aggregate supply left; decreases reducing economic growth, and lowering the standard of living. B. increases shifting aggregate demand right; increases shifting aggregate supply right; increases resulting in sustained economic growth, and a higher standard of living. C. decreases shifting aggregate demand left; decreases shifting aggregate supply left; increases resulting in sustained economic growth, equality and prosperity for all. D. None of the answers are correct.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 6E

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Question

When taxes increase, consumption _____, business investment ______, and real GDP output ______.

A. decreases shifting aggregate demand left; decreases shifting aggregate supply left;

decreases reducing economic growth, and lowering the standard of living.

B. increases shifting aggregate demand right; increases shifting aggregate supply right;

increases resulting in sustained economic growth, and a higher standard of living.

C. decreases shifting aggregate demand left; decreases shifting aggregate supply left;

increases resulting in sustained economic growth, equality and prosperity for all.

D. None of the answers are correct.

Definition Definition Total supply of goods and services in an economy at a certain price level in a specific time period.

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