Other things being equal, a reduction in taxes will
A) lead to a corresponding reduction in interest rates increasing the crowding out effect.
B) influence the short run aggregate supply curve but not the aggregate demand curve.
C) cause an increase in aggregate demand due to increases in consumption, investment, or net exports.
D) lead to a reduction in the long run aggregate supply curve as businesses enjoy greater profits.
Question 2
Which of the following is TRUE of trends in the number of new U.S. patents?
A) There was a steady increase in new patents throughout the 1970s.
B) The number of new patents granted each year has remained unchanged since the early 1970s.
C) The number of new patents granted each year declined by more than 50 percent after 2001.
D) There was a surge in new patents in the latter part of the 1990s.
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