How Do Lower Income Taxes Affect Aggregate Demand

question 26

Multiple Choice

How do lower income taxes affect aggregate demand?

• A)They increase disposable income, consumption, and aggregate demand.
• B)They reduce disposable income, consumption, and aggregate demand.
• C)They increase corporate investment and aggregate demand.
• D)They increase aggregate supply and thus increase aggregate demand as well.
• E)They reduce the price level relative to other countries, thus reducing aggregate demand.

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