A Tax Increase

Multiple Choice

A tax increase

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