1. The immediate effect of a change in personal income taxes is a change in:

A) aggregate demand (AD).
B) consumption (C)
C) investment (I).
D) price level (PL).
E) disposable income (DY).

2. Disposable income is equal to:

A) C plus I
B) C plus S
C) Y minus C
D) Y minus S
E) Y plus I

3. If taxes are raised, this causes the following to occur:

A) DY (up); C (down); I (down); AD (decrease); PL (down); RGDP (down); Y (down); Employment (down); Unemployment (up)
B) DY (down); C (up); I (up); AD (increase); PL (down); RGDP (down); Y (down); Employment (up); Unemployment (up)
C) DY (up); C (up); I (up); AD (increase); PL (up); RGDP (up); Y (up); Employment (up); Unemployment (down)
D) DY (down); C (down); I (down); AD (decrease); PL (down); RGDP (down); Y (down); Employment (up); Unemployment (down)
E) DY (down); C (down); I (down); AD (decrease); PL (down); RGDP (down); Y (down); Employment (down); Unemployment (up)