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Everything else held constant, a decrease in net taxes ____ aggregate ____.
A) increases; demand
B) decreases; demand
C) decreases; supply
D) increases; supply
Answer: A
Diff: 2 Type: MC Page Ref: 575
Skill: Recall
Objective List: 24.1 Interpret the aggregate demand and supply framework for the determination
of aggregate output and the inflation rate
Everything else held constant, an increase in net taxes ____ aggregate ____.
A) increases; demand
B) decreases; demand
C) decreases; supply
D) increases; supply
Answer: B
Diff: 2 Type: MC Page Ref: 575
Skill: Recall
Objective List: 24.1 Interpret the aggregate demand and supply framework for the determination
of aggregate output and the inflation rate
Everything else held constant, a balanced budget increase in government spending (that is, an
increase in government spending that is matched by an identical increase in net taxes) will
____.
A) increase aggregate demand, but not by as much as if just government spending increases
B) increase aggregate demand by more than if just government spending increases
C) not affect aggregate demand
D) decrease aggregate demand
Answer: A
Diff: 2 Type: MC Page Ref: 575
Skill: Recall
Objective List: 24.1 Interpret the aggregate demand and supply framework for the determination
of aggregate output and the inflation rate
Everything else held constant, an increase in net exports ____ aggregate ____.
A) increases; demand
B) decreases; demand
C) decreases; supply
D) increases; supply
Answer: A
Diff: 2 Type: MC Page Ref: 575
Skill: Recall
Objective List: 24.1 Interpret the aggregate demand and supply framework for the determination
of aggregate output and the inflation rate