A-LevelEconomicsThe macroeconomy9708/12 · Feb/Mar 2024 · Q221 Mark
The diagram shows aggregate demand (AD) curves for an economy. [Figure 22.1] Which combination is most likely to have caused the shift from AD₁ to AD₂?
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Aincome tax decrease, sales tax decrease
Bincome tax decrease, sales tax increase
Cincome tax increase, sales tax decrease
Dincome tax increase, sales tax increase
✓ Correct answer
D: income tax increase, sales tax increase
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