How Do Changes in Income Tax Policies Affect Aggregate Demand

question 272

Multiple Choice

How do changes in income tax policies affect aggregate demand?

• A)Higher taxes increase disposable income,consumption,and aggregate demand.
• B)Higher taxes reduce disposable income,consumption,and aggregate demand.
• C)Higher taxes increase corporate investment and aggregate demand.
• D)Higher taxes increase aggregate supply and thus increase aggregate demand as well.

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Definitions:

Buying Behavior

The decision processes and acts of individuals or groups in selecting, purchasing, and using goods or services to satisfy needs and desires.

Interpersonal Determinant

Factors related to social interactions and relationships that influence an individual's behavior or decisions.

Personal Determinant

factors or attributes inherent to an individual, such as beliefs, values, and attitudes, that influence personal behavior and decisions.

I5 Processor

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