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An Increase in Business Tax Rates, Combined with a Decrease

Question 10

Multiple Choice

An increase in business tax rates, combined with a decrease in consumer confidence, would have what effect on aggregate demand?


A) ​AD would increase.
B) ​AD would decrease.
C) ​AD would stay the same.
D) ​AD could either increase or decrease, depending on which change was of a greater magnitude.

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