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.
Question 2
The figure above shows the demand for fruit snacks. Which movement reflects an increase in income if fruit snacks are an inferior good?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d