Figure 27-1
-Refer to Figure 27-1.An increase in taxes would be depicted as a movement from ________,using the static AD-AS model in the figure above.

Name: Figure 27-1 -Refer to Figure 27-1.An increase in taxes would be depicted as a movement from ________,using the static AD-AS model in the figure above.
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Question

Figure 27-1 
-Refer to Figure 27-1.An increase in taxes would be depicted as a movement from ________,using the static 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 decrease in AD. This is shown by a leftward shift of the AD curve from B to A.

Figure 27-1 -Refer to Figure 27-1.An Increase in Taxes Would Be Depicted