Which of the following policies shifts the AD curve the farthest leftward?
A. a rise in taxes of $10 billion
B. a cut in taxes of $10 billion
C. a decrease in government expenditure of $10 billion
D. a decrease in both government expenditure and taxes of $10 billion
Answer:C
Which of the following policies shifts the AD curve the farthest leftward?
A. a rise in taxes of $10 billion B. a cut in taxes of $10 billion C. a decrease in government expenditure of $10 billion D. a decrease in both government expenditure and taxes of $10 billion