How Do Changes in Income Tax Policies Affect Aggregate Demand

question 150

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.
• E)Higher taxes increase government revenue, which makes consumers more confident in the future, which increases aggregate demand.

---

Definitions:

Equal Pay

The principle or requirement ensuring that employees who perform the same or equivalent work receive the same remuneration, regardless of gender, ethnicity, or other non-performance-related factors.

Pay Equity

The principle of ensuring that employees receive equal pay for work of equal value, aimed at eliminating wage disparities based on gender, race, or other non-job-related factors.

Age Discrimination

Unfair treatment of individuals based on their age, particularly in employment and workplace scenarios.

Title VII Of The Civil Rights Act

A section of the Civil Rights Act of 1964 that prohibits employment discrimination based on race, color, religion, sex, or national origin.