An Increase in Income Taxes Is a Negative Aggregate Demand

question 96

True/False

An increase in income taxes is a negative aggregate demand shock.

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Definitions:

Capital Gains

The profit earned from the sale of an asset, where the sale price exceeds the purchase price.

Cash Dividends

Profits paid out to shareholders by a corporation in the form of cash.

Retain Earnings

Profits that a company chooses not to pay out as dividends but instead reinvests in the business or keeps as a reserve for specific objectives.

Shareholders

Individuals or entities that own shares in a corporation, giving them ownership interest and usually voting rights in the company.