Figure 8-2

-In Figure 8-2, which of the following moves can be explained by a tax cut?
A)A to B
B)A to C
C)A to D
D)A to E

Question

Figure 8-2
​ 
-In Figure 8-2, which of the following moves can be explained by a tax cut?
A)A to B 
B)A to C 
C)A to D 
D)A to E

Quizplus · Accepted Answer

The movement from point A to point E can be explained by a tax cut. Point E represents a higher level of output and employment than point A, indicating that the economy has experienced growth. A tax cut can stimulate economic growth by increasing the disposable income of consumers, which can lead to higher consumption spending and business investment.

Figure 8-2 ​

Figure 8-2