Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 34 - Part XII - The Influence of Monetary and Fiscal Policy on Aggregate Demand - Quick Check Multiple Choice - Page 767: 2

Answer

c) decrease, increase

Work Step by Step

Decreases in government purchases reduce aggregate demand, shifting the AD curve inwards. An increase in taxation reduces households' disposable income, causing a decrease in consumption and an inward shift of the AD curve.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.

GradeSaver will pay $15 for your literature essays
GradeSaver will pay $25 for your college application essays
GradeSaver will pay $50 for your graduate school essays – Law, Business, or Medical
GradeSaver will pay $10 for your Community Note contributions
GradeSaver will pay $500 for your Textbook Answer contributions