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1. An increase in investment, combined with an increase in imports, would have w

ID: 1092130 • Letter: 1

Question

1. An increase in investment, combined with an increase in imports, would have what effect on aggregate demand? A) AD would increase B) AD would decrease. C) AD would stay the same. D) AD could either increase or decrease, depending on which change was of a greater magnitude.

2. A decrease in business tax rates, combined with an increase in consumer confidence, would have what effect on aggregate demand?

A) AD would increase.
B) AD would decrease.
C) AD would stay the same.
D) AD could either increase or decrease, depending on which change was of a greater magnitude.

Explanation / Answer

A) AD would increase

B) AD would decrease.

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