Refer to the Information Provided in Figure 17

Multiple Choice

Refer to the information provided in Figure 17.2 below to answer the questions that follow. Figure 17.2
-Refer to Figure 17.2. According to the new classical economists, under rational expectations an expected decrease in taxes would

A) shift AS₁ to the right.
B) shift AD₁ to the right.
C) shift AD₁ to the left.
D) not change AD or AS.