Exhibit 11-7 Aggregate Demand and Supply Model Beginning at Equilibrium

Exhibit 11-7 Aggregate demand and supply model Beginning at equilibrium E₁ in Exhibit 11-7, assume the marginal propensity to consume (MPC) is 0.90 and the government increases taxes by $100 billion. The aggregate demand curve will shift to the:

A) left by $1,000 billion.
B) right by $1,000 billion.
C) right by $900 billion.
D) left by $900 billion.