The graph of P versus Y shows a straight line, A D sub 1, decreasing linearly, a second straight line, A D sub 2, decreasing linearly to the right and parallel to A D sub 1, and a third straight line, A D sub 3, decreasing linearly to the left and parallel to A D sub 1. Point A is marked on A D sub 1, and Point B is marked on A D sub 1, to the right and below Point A, implying a point in which the price level P is lower and output Y is greater than at Point A. A diagonal arrow points from Point A to Point B. A right pointing arrow indicates a right shift from A D sub 1 to A D sub 2. A left pointing arrow indicates a left shift from A D sub 1 to A D sub 3. Refer to Figure 35-5. An increase in taxes will a. cause movement from point A to point B along AD1. b. have no effect on aggregate demand. c. shift aggregate demand from AD1 to AD2. d. shift aggregate demand from AD1 to AD3