How Do Lower Taxes Affect Aggregate Demand

question 256

Multiple Choice

How do lower 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.

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Definitions:

Capital Deficiencies

Capital deficiencies occur when a company's financial resources and assets are not sufficient to cover its liabilities and debts.

Income Ratios

Financial metrics that compare various forms of income to another number on the company's financial statement, often used to assess financial health and profitability.

Capital Balances

The amount of money that owners have invested in a business, reflected in the equity section of the balance sheet.

Partners' Capital Statement

A financial statement that shows the changes in the account balances of each partner's equity in a partnership over a period.