Figure 16-1
-Refer to Figure 16-1.An increase in taxes would be depicted as a movement from ________,using the basic AD-AS model in the figure above.

Question

Figure 16-1 
-Refer to Figure 16-1.An increase in taxes would be depicted as a movement from ________,using the basic AD-AS model in the figure above.

Quizplus · Accepted Answer

An increase in taxes would decrease disposable income, causing a decrease in consumption and a shift in the AD curve to the left from point B to point A. Therefore, the correct answer is D - movement from B to A.

Figure 16-1 -Refer to Figure 16-1.An Increase in Taxes Would Be Depicted