If taxes are increased, the AD curve
A. is not affected because a change in taxes is a nominal change not real change.
B. shifts rightward and aggregate demand decreases.
C. shifts leftward and aggregate demand decreases.
D. does not shift but there is a movement down along the curve.
Answer:C
If taxes are increased, the AD curve
A. is not affected because a change in taxes is a nominal change not real change. B. shifts rightward and aggregate demand decreases. C. shifts leftward and aggregate demand decreases. D. does not shift but there is a movement down along the curve.