A Tax Increase

Multiple Choice

A tax increase

A) increases the quantity of real GDP demanded and there is a movement down along the AD curve.
B) decreases aggregate demand and the AD curve shifts leftward.
C) decreases the quantity of real GDP demanded and there is a movement up along the AD curve.
D) does not shift or lead to a movement along the aggregate demand curve.
E) increases aggregate demand and the AD curve shifts rightward.