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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