What Are the Effects of a Change in Taxes on Consumption

question 65

Multiple Choice

What are the effects of a change in taxes on consumption and aggregate demand?

• A) If taxes increase, consumption increases and aggregate demand shifts right.
• B) If taxes increase, consumption decreases and aggregate demand shifts left.
• C) If taxes decrease, consumption increases and aggregate demand shifts left.
• D) If taxes decrease, consumption decreases and aggregate demand shifts right.

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